It is noted, that people confuse bill consolidation loan with bankruptcy. While both are used for financial restructuring, there is a lot of difference between them. Bankruptcy helps you with mortgages, medical and credit card bills whereas a bill consolidation loan helps you in merging all your unpaid debts in to one payment. Non profit credit counseling is also a way to get rid of debts.
When all outstanding debts are consolidated in to one single monthly payment, it is known as bill consolidation. The rate of interest for the resulting bill consolidation loan is lower, and the monthly payment can be adjusted according to your own financial situation. On the other hand bankruptcy is a process which is designed to eliminate the debt which you have accumulated over a period of time. Bankruptcies are of two types, i.e. Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy is opted when property and other assets are liquidated or sold in order to pay off your debt. Chapter 13 bankruptcy is known as a reorganization bankruptcy, and it is given to a person who still has some means of regular income.
Both, Free debt consolidation help and bankruptcy are ways of managing debts, and under both of them the individual is required to repay the debts owned. But, with both it is possible to eliminate outstanding debt. Bill consolidation loans give an option to people to improve their financial position along with improving their credit rating. You can get relieved from the stress of your major debts once you qualify for consumer credit debt consolidation. You should be aware of the fact that in spite of having a hassle free low interest payment, you still have to pay off the entire debt. You can also consolidate credit card bills if managing them has become difficult for you. The good news for you is that most firms will help you to negotiate a better rate of interest for the loan, and this will help to get out of debt quickly. This way the lenders will stop harassing you and you will be at peace.
Your credit score is not affected by a bill consolidation loan. In fact, your credit score will start improving, if you pay the loan consistently. There are no age restrictions for bankruptcy application. But, you have to meet certain criteria to qualify for a bankruptcy. You have to live in the United States, or have a business there and also pass test to file chapter 7 bankruptcy. You can apply for business debt consolidation loan, if you are filing bankruptcy for a business.
source : pcql.com
