Bankruptcy is a viable solution for some people, but it’s not for everyone. Before you make that drastic approach, it might first be better to consider a debt consolidation loan. Bankruptcy is designed to give an individual who is literally unable to repay his or her debts a chance to have a clean slate and start all over financially. However, it can literally take years and years to recover the credit score and start getting approved for anything again – including new cars or even apartment rentals. A debt consolidation loan, however, is a strategy that gives people struggling to repay their debts a chance to recover much more quickly, without the score taking too much of a hit.
Even if you do file bankruptcy, you still might be required to turn over certain properties over to a court trustee, depending on which type you file. If you don’t want to turn over property, you might be required to commit to some sort of repayment plan for a select number of years, after which any remaining balance is discharged. The rules vary considerably, and every individual case is different.
The reason why a debt consolidation loan is an attractive option for many people is because it simplifies the payment process and makes it easier to stay organized. Instead of trying to keep track of all of your payments every month, you’ll only have to keep track of one. It’s a lot easier to make one payment per month as opposed to several. With this type of loan, you consolidate all of your credit cards and most types of loans into one payment.
Secured and Unsecured Debt Consolidation Loan
Will the loan be secured or unsecured? Most banks prefer giving secured consolidation loans – especially if you’ve been getting behind on your payments lately and have some damage to your credit score. As long as you have some sort of collateral and are able to make payments of the consolidation loan, your score will improve in time. If you have neither collateral nor a good credit score, expect to pay higher interest rates.
Depending on your state, a negative item can stay on your credit report for 5 – 10 years. If you feel that there are any mistakes, contact the credit bureau companies to let them know. You might also want to consider the help of a credit card relief service.
A really good place to obtain debt management and debt consolidation services is with CuraDebt. It has a solid reputation for being honest and transparent. You can get a free consultation online right now.