Can I File For Bancruptcy While I’m Consolidating Debt?

By Janet Peterson on March 8, 2010, 6:01 am Posted in Business News

Even after enrolling in a debt consolidating program it may be tempting to file for bankruptcy as a way to leave a troubled past behind. In many states, as long as an individual has not filed for bankruptcy within the past seven years, filing for bankruptcy is an option at any given time without constraints. The question of filing bankruptcy verses sticking with consolidating debt and paying the debt off warrants serious consideration.

Think About The Cost

Filing for bankruptcy is not cheap. A bankruptcy attorney requires the amount of money he or she charges for their services plus the state filing fees up front. For a person who is already experiencing a severe lack of funds, coming up with a large chunk of money will be difficult. A bankruptcy will remain on credit reports for ten years and is a matter of public record. While filing bankruptcy may seem like an easy approach to obtaining a fresh start, bankruptcy should be considered only as a last resort after exhausting all other approaches to eliminating debt.

 

While paying on a debt consolidation loan may feel as though there is no end in sight, this is simply not the case. While involvement in such a program may show up on one’s credit report, is not a matter of public record. Consolidating debt also shows a real determination to work through financial problems instead of merely taking the easy way out. Rather than feeling like a dark blot in life, consolidating debt and sticking with the program will feel like a major accomplishment and will be viewed as such by an employer, landlord and the by the creditor as well. Knowing that filing for bankruptcy is always an option may be of some comfort during difficult times. The real issue involves the consequences of doing so.

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5. Will Debt Consolidation Stop A Wage Garnishment?