Debt Consolidation

Question: I have about $35 in debt should i file bankruptcy or do debt consolidation?

(Posted by: cfruit on 2009-12-27 13:02:14)

I make about $20k a year oops I have $35 grand in debt lol also most of it is NOT credit card debt but hospital bills and LOTS of tiny things

Posted by: Mia Jacob on 2009-12-29, 07:06:58

Debt Consolidation Loan is one of the most common solutions people think of when they fall into financial difficulties. Debt consolidation loans transfer debt from one place to another. While this may sound good, since many times it can appear to lower your monthly payments, a debt consolidation loan will not reduce the amount you owe. You will still pay back 100% of the debt consolidation loan, plus interest. The interest rate is sometimes lower than before, but this is because debt consolidation loans are usually secured loans that cannot be lowered or negotiated. Once you sign up for a debt consolidation loan, you have just gone from an unsecured debt to a secured debt and have put your personal assets (e.g. your car or home) at risk. At that point if you can't pay your bills your creditors can come and take your personal property - thus creating a bigger problem than you had to begin with. Debt settlement is a program designed for consumers with serious debt problems who are unable to maintain payment obligations and are considering bankruptcy or credit counseling. Debt settlement is the process in which you stop paying your creditors for some time and save that money so that you can then negotiate with them to settle the debt for a lesser amount.

Posted by: hoodankis on 2009-12-27, 13:09:05

$35? i think if you stood on a corner with a sign you could make that in a day.

Posted by: Common Sense on 2009-12-27, 13:11:15

35 bucks? That's gotta be a typo, right?

Posted by: CatDad on 2009-12-27, 13:17:28

Assuming you mean $35,000... - Debt consolidation is a risky process of deliberately defaulting on your credit cards to attempt to settle for less...like 50%. Most of these firms ONLY work with credit card debt. If the process works...you could reduce the debt to maybe $17,500....which is still a lot and you've have a ruined credit rating even after paying all this money in a settlement. I would discourage you from hiring a debt consolidation company. - Seriously, you may want to consider filing for Chapter 7. $35K in debt is overwhelming relative to your income.. - Once your file for Chapter 7, you can't file again for 8 more years. This could present a real problem for you if you have health problems and you don't have health insurance. If you file for Chapter 7, it's very important that you get health insurance. For example...if you file Chapter 7 on all this medical debt and 6 months later you have to have an emergency appendectomy and you don't have health insurance, you could have $25,000 in new debt that could not be discharged again in another Chapter 7 filing. This is why it's so important to get health insurance if you decide to file.

Posted by: Sgt Big Red on 2009-12-27, 13:23:36

If that is not a typo and you do owe $35, you will spend that much in postage fees for just filing the paperwork. No bankruptcy, if you meant $35,000 then read the following info from the govt to understand what you will need to know and what to do.(no spam at this site, just free information. uscourts.gov/ bankruptcycourts.html