Financial Information
is consolidating your bills as bad as filing bankruptcy?
Question : is consolidating your bills as bad as filing bankruptcy?
consolidate your bills
Best answer:
Answer by Feeling Mutual
No, Bankruptcy is worse for your credit rating, but a Chapter 7 Bankruptcy can completely eliminate all your unsecured debts.
Debt consolidation just extends them out longer.
Consolidating your bills only changes the terms of your debt. Bankruptcy is an admission that you can no longer pay your debt and need to cancel all or most of your debt.
Consolidating your bills can help you repay your debt faster and at a lower interest rate. It can put you in worse shape though if you get a debt consolidation loan and then max out your original credit cards again before the loan is paid off.