Bankruptcy vs Credit Consolidation

The bills are piling up. You know it is time to do something. Should you file Walworth County bankruptcy or should you try credit consolidation? This is a common question. We’ve detailed some major points below.
Walworth County Bankruptcy

Which Will Allow Me to Receive a New Loan Faster, Walworth County Bankruptcy or Credit Consolidation?

When you file a Chapter 7 Walworth County bankruptcy, you wipe out all unsecured debt. The bankruptcy filing notation remains on your credit report for ten years. This can possibly make it more difficult for you to receive a new line of credit with a financial institution. However, you will qualify for a home loan in two to three years. Credit consolidation means that you will consolidate all of your bills and then pay one monthly payment amount toward the total debt owed. This payment period can last anywhere between three to five years, depending on your amount of debt. Most financial institutions will not extend a new line of credit until your payment period has ended and you have establish some new, positive credit. This usually takes anywhere from four to six years.


Which Is a More Fail-Safe Plan, Filing a Walworth County Bankruptcy or Credit Consolidation?

It is imperative to note that most credit consolidation plans fail. According to the NFCC, 47% of enrollees drop out.

It is important to remember that when you file a Chapter 7 Walworth County bankruptcy, all unsecured debts will be eliminated if you receive a discharge. Unsecured debts include: credit cards, personal loans, payday loans, utility bills, and medical bills. As a condition of your Chapter 7 Walworth County bankruptcy filing, you are required to complete credit counseling which can be done online, telephonically or in person. Bankruptcy credit counseling will give you a head start on rebuilding your credit and is a proactive approach to not ending up in debt, again.


Advantages to Filing a Chapter 7 Walworth County Bankruptcy vs Credit Consolidation

Another positive note to filing a Chapter 7 Walworth County bankruptcy is the fact that you can start rebuilding your credit soon after you file. For instance, instead of paying cash for groceries, you would use a credit card and then put the cash you had saved for groceries toward the bill. Most credit card companies will give you a card after bankruptcy though many will hold high interest rates. However, if you pay off the balances used right away, you won’t see those high interest rates and you will be rebuilding your credit in the process. (This is just one example of a way to rebuild credit.)

One of the biggest advantages to filing a Chapter 7 Walworth County bankruptcy is that not only do you get to keep your home and vehicles (in most cases), but you also will qualify for a home mortgage only two to three years after filing. This is great news for families who haven’t purchased their first home yet and for families who need to relocate. This is a far shorter time frame than the four to six years after staring a credit consolidation program.


Contact our Chapter 7 Walworth County Bankruptcy Attorney

If you have an endless pile of debt and know you need help, schedule a free bankruptcy consultation with our Chapter 7 Walworth County bankruptcy attorney. We will be more than happy to answer all of your questions and ease all of your concerns regarding bankruptcy. You can contact our Chapter 7 Walworth County bankruptcy office by phone at 262-725-0175 or by email via our website’s contact page. Wynn at Law, LLC has Chapter 7 bankruptcy offices located in Salem, Muskego, Delavan, and Lake Geneva, Wisconsin.


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*The content and material on this web page is for informational purposes only and does not constitute legal advice.

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