Debt Consolidation vs. Chapter 13 Bankruptcy

Debt consolidation is an attractive option to many people. On its face, debt consolidation allows you to achieve the goal of becoming debt-free while still taking responsibility for your debts. The reality is often quite different. For many people, bankruptcy is a more effective solution and here is why:

  • It forces all of your creditors to the table — Debt consolidation companies can only negotiate with a limited number of creditors. The bankruptcy process brings all of your creditors to the table. When you receive the bankruptcy discharge order, you will be debt-free. On the other hand, when dealing with a debt consolidation company, you are often left with remaining debts at the conclusion of the process.
  • Interest and penalties stop accruingChapter 13 allows you to repay a portion of your debts without interest and late fees continuing to accumulate. In debt consolidation, the situation does not change. The amount you owe will continue to grow due to the continual addition of interest and various other penalties.
  • Stopping creditor harassment — When you file for bankruptcy, all collection activities must cease immediately. From phone calls and mailings to lawsuits and foreclosure, no further collection activities can take place. With debt consolidation, you will continue to be subject to the same level of creditor and collection agency harassment as before.
  • Having a dedicated advocate — When you hire an attorney to assist you with bankruptcy, you have the benefit of having someone experienced with the legal system there to make sure your rights are respected and to help you get the most out of the system. Debt consolidators are third-party, for-profit businesses whose primary goal is to make money by charging a fee or percentage of that which is paid to a creditor.

Creating A New Financial Beginning For You

At Grech Legal, our goal is to help educate people about what the best options are for them and their individual circumstances. Bankruptcy is not right for every situation, but it does offer a number of advantages over debt consolidation. Too often, people think they are going to be able to resolve their difficult debt situations through debt consolidation only to have to file for bankruptcy after spending years struggling to satisfy their creditors. Attorney Matthew Grech is happy to review your situation and help you understand the pros and cons of the various types of debt relief options available for you.

Learn More About Debt Consolidation In Redwood City, California

It pays to learn all you can about all of the options available to you for debt relief. Turn to Grech Legal to learn more. To schedule a free initial consultation, call 408-214-0385 (San Jose), 510-270-5602 (Oakland) or 650-549-7728 (Redwood City), or contact us online.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

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