Debt is an unavoidable part of American life, as many people can attest, but sometimes, it can get away from us. For Texas residents facing serious debt problems, there are multiple solutions available to help remedy the situation. However, it is important to understand the differences between these options, including debt consolidation and Chapter 7 bankruptcy.
Debt consolidation is a good choice for people whose debts are beginning to mount but can still be affordably handled. Consolidating debts basically means rolling them into one, often setting up a single payment that handles multiple creditors at once. In some cases, this payment can even feature a lower interest rate or can be set up as a long-term payment plan that allows the debtor to pay the amounts back slowly over time. Home equity loans, personal loans and balance transfer credit cards are common tools in consolidation.
For individuals and families for whom debt has become an insurmountable obstacle, Chapter 7 bankruptcy is also an option. This is considered a liquidation bankruptcy, which means some assets may be sold off to pay down creditors. Other assets are considered exempt from this process, but generally speaking, Chapter 7 is a way to transfer existing material assets into capital that can be used to pay back other debts.
Obviously, this can be a complicated process. Deciding whether Chapter 7 bankruptcy, consolidation or some other option is best can be daunting. This is why the support of a dedicated attorney is so helpful in this process. That individual has the background and experience necessary to navigate these difficult waters and lead a Texas debtor into financial stability.