Debt happens, and when it does, the worst thing a person can do is flounder under missed payments, overreact due to pressure from creditors, and run credit to the ground. When a person is facing debt, they can choose to consolidate the debt or file for bankruptcy.

Before making a decision, weighting the pros and cons of each can help determine which option is better for the individual's situation.

There are three things that should be considered before choosing a debt repayment plan:

• How severe is the financial situation? Is even putting food on the table a struggle or can monthly payments be made?
• Would one payment and a mark on a credit score be more or less helpful than repeat payments?
• Does hiring a lawyer or dealing with a debt company sound more comfortable for the individual's needs?

Why choose debt consolidation?

Debt consolidation is what happens when a company becomes involved in a person's debt. A person will hire a debt consolidation company to call creditors and renegotiate a payment plan. The company will then take a cut for their services. Considering that the purpose of these companies is to renegotiate and handle many different instances of debt, the level of care taken with each case may not be personal.

In debt consolidation, creditors will freeze accounts that are open and are late in payments. As payments are made to pay off those debts, the bills will begin being marked as paid. This means that the debt is slowly being paid and the credit report will not indicate that bankruptcy has been filed.

Is bankruptcy the right choice?

In bankruptcy, many debts can be wiped clean. This works for those with many different kinds of debts that would not be easily paid off. However, bankruptcy will stay on a credit report for 7 years and this information can be accessed by other industries.

Bankruptcy may also require that a lawyer is needed to help ensuring all rule of law is being followed in the bankruptcy filing. An attorney can also help ensure that creditors are both assured of their repayment and do not harass the person that is late on their repayments. This legal protection may make filing for bankruptcy worthwhile.

No matter what scenario a person chooses, their goal is always the same: get out of debt and back on financial track. The best option will be the one that a person is most comfortable with.

If concerned with debt, our directory can help find an experienced bankruptcy lawyer in a convenient area!