Answers.com > Wiki Answers > Categories > Business & Finance > Personal Finance > Debt and Bankruptcy > Is bankruptcy or consolidation better for your credit?

Is bankruptcy or consolidation better for your credit?

In: Debt and Bankruptcy, Improving Your Credit Rating, Debt Counselors and Consolidation [Edit categories]

Answer:

If the referrence is to a consolidation loan then that depending on the party's financial situation would be a better choice than BK. If the issue is whether a chapter 7 or 13 BK is the best choice, it is always preferable to pay debts even partially. However both are detrimetal to credit history. A 7 remains for 10 years a 13 when satisfactorily discharged remains for 7.
Answer

Always debt consolidation is far better. Bankruptcy should be your last resort as it affects your credit score badly for years to come. In debt consolidation you pay the debt consolidation company the repayment amount and they will inturn pay your creditors in such a way that your rate of interest is reduced. You can even go for debt settlement where your debt levels are reduced.

First answer by ID3483100030. Last edit by Keats. Contributor trust: 4415 [recommend contributor ]. Question popularity: 94 [recommend question].

[report abuse]

Can you answer these Debt and Bankruptcy questions?

	Can you go bankrupt in IRS?	Answer it!
	Why provision for doubtful debts is prepared?	Answer it!
	Why provision for doubtful debt is prepared?	Answer it!
	When a government runs a budget deficit what must it eventually to do in order to pay back its debt?	Answer it!
	What are acceptable computer programs for recording keeping?	Answer it!

Relevant answers:

Is it better to file bankruptcy or do a debt consolidation?
Of course, it's up to you to decide, but I think that it's much better to apply for debt settlement provided by debt consolidation companies rather than file babcruptcy. The most important reason for...
Is a dismissed or discharged bankruptcy better on a credit report?
In theory a dismissed BK should be removed from a CR in seven years. A discharged BK, in ten years. Equifax, however will usually inform the consumer that they will carry both for the full ten. The...
Can you get credit after bankruptcy?
Yes. It is more difficult, but it is also ESSENTIAL to recovering from bankruptcy. You must take out credit and have precise, on time payments in order to help rebuild your damaged credit score post...
After bankruptcy can you get a credit card or a credit line?
Yes you can get a credit card, and it will help you rebuild your credit if paid on time. Go Google and type in credit cards for people with bad credit, you will get loads of hits.
Is debt consolidation a better than bankruptcy?
Bankruptcy is a complicated process and it should be a last resort as it will damage person's credit for up to 10 years. Consolidating debt is always a better way to solve debt problems and protect...