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Which is Better: Debt Consolidation or Bankruptcy?

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Which is Better: Debt Consolidation or Bankruptcy?

The type of debt you or your loved one may have can be the driving force behind how you decide to eliminate your debt. If you have a significant amount of credit card debt but do not have any personal loans or other debt, such as medical expenses, debt consolidation may be the best option for you, as you can turn multiple monthly credit card payments into one monthly payment. However, if you have other debt in addition to credit card debt that is keeping you from being able to manage day to day expenses, and/or from being able to save money, filing for bankruptcy might be your best option for putting the financial stress behind you.

It is difficult to say that debt consolidation is better than bankruptcy or vice versa, because one method of debt elimination may be better suited for some individuals than for others. As such, a thorough evaluation of your financial situation, your ability to manage your debt, and your overall goals are essential to determining which option of debt elimination is better for you.

Debt Consolidation

There are a few ways to consolidate your debt. Many individuals take on a loan that is used to pay off all of your credit card debt so that you owe one monthly payment to go towards your debt consolidation loan. Depending on the type of loan you get and what the interest rate and other terms of the loan may be, choosing to obtain a loan in order to consolidate your debt may not make any difference at all in terms of the amount you owe. It may turn out that you will end up paying more in the long run by taking on a loan to eliminate your credit card debt. However, debt consolidation with the use of a loan may be very beneficial if you are able pay less in interest over time, keeping your monthly payment manageable.

Another way in which you can consolidate your debt is to participate in a debt-management program that will allow you to lower your interest rates and consolidate all of your credit card payments into one reasonable monthly payment. This may allow you to save thousands on interest and pay off your credit card debt in a much shorter period of time. With such a program, you pay a debt-management agency a monthly payment that is then distributed to your creditors. The cost for participating in the program is typically a low monthly fee (some programs cost about $25 per month). However, you should always be aware of potential scams that could cost you more than you bargained for.


If debt consolidation doesn’t seem like the best option for you, then filing for either Chapter 7 or Chapter 13 bankruptcy may be your best option for eliminating your debt. The bankruptcy process is a little more complicated than debt consolidation, so it is important to fully understand what your rights and obligations will be during your bankruptcy. You may be able to eliminate your debt much more quickly by filing for bankruptcy, as it could take you up to five or more years to pay off your debt through consolidation, depending on how much debt you have. A qualified Bankruptcy and Debt-Management Attorney can evaluate your financial situation and provide you with an opinion as to what method of debt elimination will be the best option for you.

Contact The Law Offices of Georgette Miller and Associates, P.C. Today

Whether or not bankruptcy is the right choice for you is a discussion that you should have with both your loved ones and a highly skilled Bankruptcy Attorney. Depending on your individual financial situation, it may turn out that debt consolidation is the better option for you. However, you may not fully understand all of your options until you seek the advice of an attorney who can provide you with all of the information and resources you need to make an informed decision that will work best for you. The Bankruptcy and Debt-Management Attorneys of the Law Offices of Georgette Miller and Associates, P.C. have the skill and dedication to provide you with the legal representation that you deserve. To schedule an initial consultation with one of our Bankruptcy Attorneys, contact the Law Offices of Georgette Miller and Associates, P.C. today by calling (866) 96-GMLAW. Our attorneys conveniently provide services to individuals and businesses in and around Philadelphia, PA, New York, New Jersey, Washington, D.C., and Baltimore, MD.