Which is better, debt consolidation or bankruptcy?
In terms of credit score. I have a decent credit score, but a lot of debt. I want to make the best long term choice.
It is impossible to suggest a better course of action without knowing the details of their situation, and I would not recommend specific personal financial disclosure information in this public forum. However, you have more options: 1. Consumer Credit Counseling (plan debt management) This option should not affect your credit score, but most credit card companies add a flag or a note in your credit file to inform anyone looking at your records about your enrollment in a plan of debt management (provided by an agency of CCC). This can prevent obtaining a loan (but not be shopping for a loan if you already drowning in debt, anyway). Only use approved government agencies CCC (see link below). 2. Debt Consolidation (mortgage refinancing) This should only be used by someone who can hold a Once all the debt that is moved out of their credit cards. Credit often, newly available card balances are so tempting that people who move their unsecured debt credit card for a mortgage insured reach the new credit card debt (and lose your house when there is too much to handle). 3. Debt Settlement (Debt relief) the liquidation of debt is when you (or a professional debt negotiator) negotiates a solution to balance reduced satisfy a debt. This should only be used by people who can not afford a plan of debt management (CCC) and who also want to avoid bankruptcy and are willing to pay their debts according to their financial capacity. The process of saving up and settlement of debt negotiation is usually detrimental to your credit score so keep this in mind when considering this option. 4. Bankruptcy (Chapter 7 or Chap. 13) While the support creditor bankruptcy law that was passed last year has designed to make it more difficult to repay their debts through Chapter 7 bankruptcy, bankruptcy is still an option. It is necessary to understand the difference between Chapter 7 (in essence canceling all debts) and Chapter 13 (a court of structured payment plan). 5. Self-Managed Plan You may be able to pay their debts, if you are able to cut spending, use a smaller budget and stick to a plan for accelerated depreciation. This process involves the payment of minimum payments monthly on all accounts except his most interesting account. In that account, to pay more (as all you can). Once paid, apply the amount paid to that account at the top of what you are paying into the following account (tied for April). Repeat this process until all debts are paid. While doing so, continually negotiate your credit card company to reduce the APR (be sure to threaten a balance transfer to another account and be ready for transfer if they refuse to give a break). Again, not a question of what is best. It is a question that is best for you given your specific situation, concerns and objectives.