Should You File for Bankruptcy Or Use a Debt Consolidation Agency?

Several people, who have found themselves in a very tight situation with their finances, wonder if filing a chapter 13 bankruptcy is better than using a debt consolidation agency. The answer is that it totally depends on your situation, but most of the time it is always better to use the debt agency.

Why should you use an agency instead of filing for a chapter 13? The answer is very simple. One is less harmful to your credit. What we mean by this is that if you file a bankruptcy, it can stay on your credit report for up to 7 years. Unlike a Chapter 7, the 13 requires the debt to be paid back, which means that you will not be able to make any credit purchases for up to five years. With this black mark on your credit you will essentially lose your buying power and lose your ability to make credit purchases. This may not sound like a big deal, but having the ability to use a credit card in a pinch can be a lifesaver, not to mention the ability to buy a home or car can be life changing.

Credit debt services are much better than the bankruptcy option as the agency will help to reduce your monthly payments and can often times help you settle your debt for less than is owed. This can save you thousands of dollars worth of payments in the long run while lowering your current monthly payment. Not only will it save you the stress of paying your bills at the end of the month, but choosing this route lets you keep your buying power and allows you to continue to buy items on credit.

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