Trying to pay off debts can be a challenge, especially if the load feels insurmountable. Fortunately, an experienced bankruptcy attorney can help relieve the burden by providing a range of options to reduce the payment number or amount or eliminate them entirely. Two of the most popular options include debt consolidation and bankruptcy. This guide outlines the differences between these two approaches to resolving your financial problems, so you can make an informed decision.

Bankruptcy

The bankruptcy code offers two programs for borrowers who are unable to meet their financial obligations. Filing for Chapter 7 bankruptcy allows you to discharge most unsecured debts, giving you a clean slate to start rebuilding your financial future. A Chapter 13 bankruptcy, on the other hand, provides a structured method for catching up on secured debts like mortgages and car loans, while eliminating most consumer accounts. A bankruptcy attorney can determine which program is best suited to your situation. They will also help you prepare the petition to the courts to increase your likelihood of receiving approval.

Debt Consolidation

Unlike bankruptcy, debt consolidation does not decrease the amount of debt you own. Under these programs, you essentially take out a new loan to pay off existing accounts, potentially lowering the monthly payment amount and interest rate. If you’re unable to qualify for either a Chapter 7 or Chapter 13 filing or need a little breathing room to catch up on payments, a bankruptcy attorney may recommend consolidation instead.

If you’re experiencing financial difficulties and feel like you’re out of options, then the Anderson Law Firm in Archdale, NC can help. For over 20 years, they’ve provided high-quality legal services to clients throughout the area, helping them recover from debt. Visit them online to learn more about their services, and call (336) 431-7336 to schedule a consultation with a skilled bankruptcy attorney. To get more updates and legal tips, follow the law firm on Facebook.

The information contained in this site is for general guidance on matters of interest only. The application and impact of laws can vary widely based on the specific facts involved.  We are a Debt Relief Agency.  We help people file for Bankruptcy Relief under the Bankruptcy Code.