Is debt consolidation the same as bankruptcy?
Is debt consolidation the same as bankruptcy?
When people find themselves in financial trouble, bankruptcy or debt consolidation can help them get back on their feet. Both processes wipe out many of their debts and can drastically lower their interest rates. Debt consolidation also offers other benefits, such as helping to reduce fees and late payments. It can be a much better solution than bankruptcy, which will affect your credit for seven to ten years.
Despite the similarities, these two approaches are very different. Debt consolidation involves paying one lump sum to your creditors, whereas debt settlement involves negotiating with your creditors to reduce your total debt. Using a debt settlement company can help you with this process, as they will negotiate directly with your creditors.
A debt consolidation loan will not wipe out your debt, but it will lower the interest rate and make it easier for you to manage your monthly payments. It requires a good credit score and a cosigner with good credit. While debt consolidation doesn't erase your debt, it can help you pay off your remaining debts in a reasonable amount of time.
Besides lowering your monthly payment, debt consolidation can also help you improve your credit score. The process can help you consolidate your debts, simplifying your budget and reducing your chance of missing a payment.
If you have any questions or need a Bankruptcy Lawyer, please call this law firm for a free consultation.
Ascent Law LLC
8833 S Redwood Road Suite C
West Jordan UT 84088
(801) 676-5506
