If you are living paycheck to paycheck and still unable to make ends meet, it is time to consider the different debt relief options available to you. Two of the most common ways people obtain relief from burdensome debt is debt consolidation and bankruptcy. The skilled legal team at Levitt and Slafkes can review your individual finances and help you decide which options will benefit you and your family the most.
Consolidating your debt is a process whereby you obtain one larger loan that is used to pay several smaller loans. The benefit of consolidation is that we can help you negotiate loan terms that are more advantageous to you. Rather than dealing with numerous small loans that have differing interest rates and due dates, you will have one loan with a lower interest rate to maintain.
The main disadvantage of consolidating your loans is that the process can take a significant amount of time and there is no guarantee of a successful result. Numerous creditors are involved in order to ensure all of your smaller loans will be paid in full, which can make it complicated. Additionally, it may be difficult for you to qualify for the new loan. When you are past due on several payments, your credit score suffers. Lastly, once you have the new loan, you still have the burden of paying it off. This can mean that your financial relief is still years down the road.
Chapter 7 or Chapter 13 Bankruptcy
When you file a personal bankruptcy, the automatic stay is immediately effective. This means that all collection activity against you comes to a halt. Thus, you feel immediate relief from harassing debt collection calls, letters and even lawsuits. Additionally, most (if not all) of your unsecured debt can be discharged or eliminated in a bankruptcy filing. This means you are no longer liable to pay the thousands of dollars you owe on your credit cards or medical bills. Bankruptcy can also possibly eliminate any second or third mortgages against your home. At the conclusion of your bankruptcy case, you are no longer obligated to pay any of your discharged debt, which provides a second start for you financially.
The drawback to filing a personal bankruptcy is the negative impact it has on your credit score. However, if your credit score is already low, the impact is actually minimal. You can immediately start to rebuild your credit score as soon as you emerge from bankruptcy. With hard work and patience, your credit score will improve before you know it!
If you have questions regarding the best strategy for obtaining debt relief, let us help. We are experienced in handling a variety of bankruptcy issues. Our offices are conveniently located in South Orange, New Jersey. Please call us at 973-323-2953 or online to schedule your free initial consultation today.