Bankruptcy-debt Consolidation Lender

The last option a debt consolidation lender has when it comes to debt is bankruptcy. Bankruptcy provides debt relief to consumers who cannot pay their bills. The whole process is done in a legal procedure with the help of a lawyer. The decision to file for bankruptcy is a serious step, and is usually taken when other efforts to correct financial difficulties have fallen apart. Most consumers who declare bankruptcy do so under Chapter 13 or Chapter 7 of the U.S. Bankruptcy Code.

• Chapter 13 or "reorganization" allows debtors with a steady income to pay off all or part of their debts over a 3 to 5 year period instead of surrendering property.
• Chapter 7 or "straight bankruptcy" is the most drastic type of bankruptcy. Debtors turn over to a court representative all of their assets for distribution to creditors. Unlike Chapter 13, there is no repayment plan, and the court will then declare that legally the debtors are no longer in debt.

Since bankruptcy is a serious step, one should consider other options such as:

• Pay off all your bills by yourself
• Hire a professional financial advisor who would guide you with your financial budget.
• Get the services of a non-profit debt management agency.

Getting help from consumer credit counseling service is sometimes considered a better option. The reasons being that you get a lot of benefits from being in a debt management program, such as lower interest rates, no late fees or finance charges, savings of up to 40-50%, one simple monthly payment.