Television commercials, advertisements, and credit card company promises all lead you to believe that consolidating and settling your debt will somehow make your payments and debt as a whole more manageable. Sure, it looks “cleaner” when you see one big number as opposed to four separate debts, but is it really as healthy for your wallet as your creditor wants you to believe?

 Not only is settled consolidation a wolf in sheep’s clothing, filing for bankruptcy* is almost always a better option.  

1. Why Settled Consolidation Is a Bust – Companies that offer debt settlement services prey on people who are already overwhelmed by debt. Additionally, and perhaps more disturbing, the settlement company makes money regardless of whether you satisfy your debts. That means they don’t care if you can’t manage your payments. And, if a company doesn’t work with your consolidator, you risk being sued anyway. Settled consolidation has the benefit of turning your multiple payments into a potentially smaller, easy payment, but if you can’t afford that payment and you still can’t overcome your debt, what is that easy payment doing for you?
2. Why Bankruptcy Offers More – Whereas debt settlement and consolidation last years – sometimes even 10 or 20 years – a Chapter 7 bankruptcy extinguishes your unsecured debt in 4 to 6 months. No more calls from creditors and no more falling behind on your payments. What might be the most surprising to you is that bankruptcy can be better for your credit score than consolidation; when you consolidate your debts, they remain on your credit score, but when you file for bankruptcy, you immediately begin repairing any damage your debt has caused.**

At Ross & Ross, we love bankruptcy, because we have seen it transform the lives of our clients. In addition to bankruptcy and debt relief, we are a full service firm, which means we handle almost everything.  If we don’t handle it, we know who does and can direct you to them. Call us anytime you need help.

* Federal law requires the following disclosure: We are a debt relief agency helping people file for relief through bankruptcy under the bankruptcy code.

**Rebuilding credit does take time but begins right after the filing of the Petition.

***This is lawyer advertising.