Debt Consolidation vs. Chapter 7 or Chapter 13 Bankruptcy

Debt Consolidation might seem like an attractive option when a person begins to see growing debt and no way to escape it. Oftentimes, debt consolidation in Denver, Aurora, Englewood, and Littleton may just be a temporary fix to a more serious problem. Most people living in Highlands Ranch, Lakewood, or Castle Rock come out of a debt consolidation plan with more debt than what they originally started with. Debt consolidation does nothing to address the root problem: there is not enough money to pay the bills that a person owes.

A Chapter 7 or Chapter 13 Bankruptcy requires the person filing to go through a credit counseling course after filing. This is beneficial for many people as they may be able to see what missteps they may have made in the past with their money and learn how to avoid those mistakes in the future. Debt consolidation offers no such lessons. Instead, these programs offer a quick patch up for a problem which may have deeper roots.

A Chapter 7 or Chapter 13 Bankruptcy actually eliminates debt as opposed to just merely giving the applicant a different type of payment plan. Putting all your debts into a monthly payment schedule may only be helpful if the person is really neglectful of where their money is going. Most times, the real problem is lack of finances, not the order of the bills.

A Chapter 7 or Chapter 13 Bankruptcy gives the filer protection from creditors and their hassling phone calls. Bankruptcy is put in place by the government as a protection from those people who are calling to collect, and creditors recognize this. They are required to stop hassling you after you file for bankruptcy. Debt consolidation offers no such protection and creditors will begin to call and harass you the second you fall behind on payments.

Overall, debt consolidation is a cheap band aid for a broken bone. A bankruptcy may be a bit more costly up front, but in the long run it is best to address the problem with a solution which will actually resolve it, as opposed to a temporary fix. If you are considering a Chapter 7 or Chapter 13 Bankruptcy, contact experienced bankruptcy attorney Barry Arrington at 303-205-7870 for your best, fresh start possible.