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There are different solutions to money woes. When in financial straits, people often lean towards debt consolidation instead of bankruptcy because they believe that personal bankruptcy will ruin their credit. There are, however aspects of debt settlement to consider before making the decision not to file.

If you are in financial trouble and are considering debt consolidation it is important to know what you are getting into.

Depending on your financial situation, there are benefits to personal bankruptcy over debt settlement. Hines Law is a full-service Legal Firm that handles all types of personal debt relief matters. Deciding which is the right choice for you depends on your debts, assets, and your income.

Debt consolidation involves working with a debt settlement company. This means you give them all of your bills and you are obligated to pay those bills through them. Instead of making several different payments at different times of the month to various creditors, you only need to make one payment, once a month to the debt settlement company.

They deal with the creditors which means you don’t have to, however, you also have to pay the debt consolidation company a fee to manage your debt. This could get costly since you need to pay a fee for every creditor they make a debt settlement deal with.

If you have too much debt, it could take years for the company to settle all of your debts, thus affecting your credit score. Your credit score drops because there is “hold” on the payments of some loans until an agreement is reached and some creditors may pursue judgements.

Another problem with debt consolidation is that you may be responsible to pay taxes and owe money if some of your debts are forgiven.

If you can’t make ends meet and have lost control of your finances, personal bankruptcy may be an option for you. Out next blog post will talk about the advantages of bankruptcy over debt consolidation.

Filing personal bankruptcy with the right attorney can help improve financial health and open the door to a new beginning. The bankruptcy attorneys at Hines Law are compassionate and skilled at understanding the realities common to debt relief. We provide clear and practical advice so that our clients capture the best the legal system can offer.

Hines Law serves the greater Boston area including Middlesex, Framingham and Worcester Counties. When we meet with prospective clients, we are able to advise whether bankruptcy is the right choice, and if so, what form of bankruptcy is best to file based on each individual’s unique circumstances.

Call us today for a Free consult!