Debt consolidation or filing bankruptcy: Which one is the right choice for you?
Debt is nothing more than a burden on your daily life and dealing with it while handling your chores can nourish a difficult situation. It is often confusing and full of worries. However, one can choose one of the two options which include debt consolidation or bankruptcy. Choosing any of the two requires one to understand all long-term as well as short-term effects offered by these options. Let’s get into the things to know about bankruptcy and debt consolidation.
Facts:
To begin with, debt consolidation simply translates to getting in touch with a debt counseling agency which can assist you in bringing down the burden of your debt. Debt help experts are the middleman establishing a relationship between you and the credit providers to cumulate a strategy that benefits you and eases down the burden of credit payment.
On the other hand, filing for bankruptcy is defined as a process where you attempt to block your credit providers from extracting money while you get back to a better position financially from being unable to pay off your debt. However, filing for bankruptcy in Scotland or wherever you need to file it isn’t an easy process. It requires one to qualify under either of the two chapters named Chapter 7 and Chapter 13.
Benefits:
Debt consolidation services come with a level of discretion which means that these experts work in a concealed manner to provide help to the debt owners. Debt owners do not have to worry about any reflection on their credit report with regards to the services hired. Bankruptcy, however, provides the debt owner with a clean chit. This allows the debt owner to deal with the pending amount without the tension of constant retrieval calls from the credit company.
Costs:
Debt owners should always keep in mind the fact that declaring yourself bankrupt or seeking debt consolidation doesn’t come free of cost. The services provided by credit counseling agencies are minimal, and primarily they do not charge for the counseling. The charges acquired by debt experts are just for the debt management plans prepared by them to handle your debt situation. Bankruptcy in Scotland requires one to hire an attorney which requires a good amount to be paid to the individual.
Out of the two, Bankruptcy comes as a great option for the debt owners who have a major pending debt. It should always be the last resort as it takes away your right to claim any asset you own.