The most important difference between debt consolidation and bankruptcy is who it protects. As a bankruptcy attorney, Mark fights for your rights. Many debt consolidation companies are privately owned businesses that are sponsored by creditors. In addition, those private entities usually negotiate with one creditor at a time to reduce your debt and the creditor has all the control. They determine how much if any of the debt can be forgiven.  So the question becomes should you consolidate your debt, or choose to file for bankruptcy? When you choose to file Chapter 13 bankruptcy, the court makes that decision based on what you can afford to pay back.

There is no set time limit for creditors to collect on your debt when you use a debt consolidation company.

Also you will have no guarantee of how much the monthly payments will be.
The payment period in a Chapter 13 case is set for three or five years. Many people pay back about 10 percent of what they actually owe and the remaining debt is discharged. Unlike a debt consolidation company, you will not have to worry as much about struggling to make your monthly payment.


Another drawback to using a debt consolidation company is that your will still have to pay taxes associated with you debt even after you pay it off.  Once your debt is discharged by the courts in a bankruptcy case, you are no longer liable for the taxes on that debt. Debt consolidation companies also don’t have the backing of the court to stop lawsuits, wage garnishments, or repossessions. The automatic stay implemented by the court in a bankruptcy case is a direct order that creditors must abide by, and which prevents them from taking any additional action against you.

Debt consolidation companies take longer to resolve debt, offer no guarantee of resolution, and cannot protect you from further harassment from creditors. Bankruptcy is faster and more reliable. Contact the Law Office of Mark A. Bandy P.C. today!

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