Posted on
February 9, 2010
at
4:56 am
Is debt consolidation a solution over bankruptcy? Could be, but that depends on theconsumers' needs. If he/she is facing foreclosure, a lawsuit, a repo ... and needs to buy time - then it's bankruptcy over debt consolidation.
Posted on
February 9, 2010
at
4:59 am
Your post also answered the question When is debt consolidation not the appropriatesolution over bankruptcy (?)
Posted on
February 9, 2010
at
5:00 am
Which brings us to the next question - When is debt consolidation the right solutionover bankruptcy?
Posted on
February 9, 2010
at
5:04 am
When is debt consolidation the right solution over bankruptcy? -- When the unsecured debt is not too high (less than $10,000), the accounts are still current but the consumer is having a hard time managing the monthly payments because of high interest rates. When you say debt consolidation (credit counseling) you are most probably talking about the Debt Management Plan. It negotiates the consumers interest rates so he/she can pay down his/her principle much quicker.
Posted on
February 9, 2010
at
5:14 am
Just to add to that, credit counseling (Debt Management Plan) costs $25/mo. after athe one time set up fee. That's very affordable but if the consumer skips payment the agency has the right to kick him/her out of the program regardless of whether or not they've had progress with the negotiation - so to answer the question, When is debt consolidation the right solution over bankruptcy? - it's when the consumer can sustain the monthly payments (on time).
Posted on
February 9, 2010
at
5:16 am
Is debt settlement also considered a debt consolidation program? If so, when is it a good solution over bankruptcy?
Posted on
February 9, 2010
at
5:23 am
If the debt amount is $10,000 or more and the accounts are past due - plus if the consumerdoes not need bankruptcy's automatic stay provision.
