Consolidation or Bankruptcy?

Consumers with very large amounts of debt are often forced to decide between bankruptcy and online debt consolidation. We've provided a list of questions every debtor should answer before making this important decision.

How much debt do you have? If you have so much debt that it would be impossible for you to ever pay it back even with improved interest rates, you may be a better candidate for bankruptcy than debt consolidation online. On the other hand, if you have $20,000 of debt or less, debt consolidation could still work for you.
What kind of debt are you struggling with? Online debt consolidation lends itself well to unsecured debts because they tend to have higher interest rates. If your problems are mainly with unsecured debts, such as credit cards and medical bills, you might be a good candidate for debt consolidation. On the other hand, if you're also struggling with secured debts like auto loans and home mortgages, bankruptcy may provide more relief.
Can you afford to file for bankruptcy? Although it's possible to file for bankruptcy on your own, it's strongly recommended that you seek legal counsel. Legal expenses are just one of the many costs of declaring bankruptcy; you also have to pay the filing fee, which is different for each state. In other words, bankruptcy can get pretty expensive, especially for consumers who are already on thin ice financially. Online debt consolidation can sometimes provide a cheaper alternative.

Have you tried consolidating your debt before? The best candidates for debt consolidation online will have not attempted professional consolidation previously. If you've already enrolled in an online debt consolidation service and failed, you chances of succeeding the second time around are slim. For debtors for whom consolidation didn't work, it may be appropriate to look into bankruptcy.
Do you want to keep your assets? Filing for bankruptcy typically requires you to forfeit some or all of your assets in order to help pay some of your bills. For example, you might lose your vehicle, your home, and any other valuable possessions you have. If you do not want to part with your assets, you should consider online debt consolidation instead.
Do you have a genuine desire to repay your creditors? When you declare bankruptcy, you're basically telling your creditors that you will never pay back the money you borrowed from them even though you promised to do so. Debtors with an aversion to shirking their repayment obligations often choose online debt consolidation instead of bankruptcy because they have an earnest desire to repay their creditors honestly.