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Is personal bankruptcy or debt consolidation better?

Balancing multiple monthly payments is a juggling act that most people in Connecticut cannot keep up with forever. In some situations, debt consolidation can help individuals create more manageable payment schedules that get them back on financial track. When this is not possible, personal bankruptcy may be a more effective option for relief.

It is surprisingly easy for the average consumer to discover that they have built up quite a bit of credit card debt. When this debt is spread across multiple cards with different monthly payments, repayment can begin to feel impossible. Rather than scrambling to make each month's minimum payments, some consumers choose to take out a personal loan which they then use to pay off all of their credit cards. After that, all they have to do is focus on a single, monthly payment for the personal loan.

Student loans can also be consolidated, although generally not through a personal loan. The process of refinancing is a bit more involved, but there are no associated fees for student loans. Borrowers can also choose between a variable or fixed interest rate. Repayment terms generally last anywhere from five to 20 years, and refinancing gives the same benefits as consolidating credit card debt -- taking multiple monthly payments and turning them into just one.

Consolidation and refinancing can be helpful to those who just need a little help to get back on the right financial track. However, this is not the case for everyone, and some consumers in Connecticut could benefit more from personal bankruptcy. Whether through Chapter 7 or Chapter 13, individuals can discharge their debts and help construct improved financial foundations for their lives.

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