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Is bankruptcy more effective than debt consolidation?

At the law offices of Timothy J. Sierra, we know that bankruptcy can seem like a huge step for most people. After all, declaring bankruptcy can have long term and lasting implications. We know that no one in the Tampa area wants to be in a position wherein he or she has to consider bankruptcy, but unfortunately, it is necessary for some individuals in order to get out of debt.

Some people want to avoid filing for bankruptcy at all cost, which means they will consider other options, like debt consolidation for example. While debt consolidation can be an effective way to get out from underneath severe financial strains, it is not always the right answer. In fact, in many cases, bankruptcy is a better option than debt consolidation, for a lot of people.

According to Chron.com, bankruptcy has several advantages over debt consolidation, including, but not limited to the following:

  • Creditor Protection – while bankruptcy immediately makes you exempt from creditors being able to hassle you and/or file lawsuits against you, debt consolidation does not offer this same exemption.
  • Excludes Creditors – with debt consolidation you come up with a payment plan that involves your creditors’ input. However, when you file for Chapter 13 bankruptcy, your creditors have no say in how much you pay back.
  • Total Coverage – all of your debts are included in the deal when you file for bankruptcy. However, in debt consolidation, your creditors do not have to go along with the arrangement.
  • Interest Not Accrued – as soon as you file for bankruptcy interest stops being added onto your debt. That is not the case with debt consolidation, as fees are paid up front before the negotiation even begins.

If you would like to learn more about the benefits of bankruptcy as opposed to debt consolidation, then please visit our bankruptcy/debt consolidation comparison page.

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  • "When I first came to the decision to file for bankruptcy, I had no idea where to start. I began researching attorneys on the internet and came across the information for Tim Sierra. Since he specialized in bankruptcy and had a lot of experience......"
  • The process of going through bankruptcy could be very overwhelming but Tim made me feel at ease and I felt that my needs were being taken care of. I truly feel that he had my best interests in mind and the lines of communication were always open....
  • "I had to file a Chapter 7 bankruptcy. I didn't know anyone who could refer someone so I took a chance and just looked on the Internet. I don't remember exactly why I chose Mr. Sierra, but I am glad I did..."
  • He was honest, straightforward, and hard-working. In my case I ended up with some extenuating circumstances and he handled the matter professionally even though I'm sure the work probably exceeded what he originally felt it would be....
  • I don't ever write reviews, and I had no prior relationship with Mr. Sierra. This review is simply being written as a service to others that Mr. Sierra is an excellent attorney and should be considered for your needs if you need one....
  • "I'm very happy to have been referred to Tim for my Chapter 7 filing. He was knowledgeable in his field and very responsive in replying to any questions or concerns I had. Tim was also very accommodating with meeting times..."
  • " I recently was in need of Mr. Sierra's services and I found him to be very understanding and helpful in my particular circumstance. He met with me and explained everything in full detail and also answered every question that I had....."
  • " I recommend Timothy Sierra a loyal and dependable lawyer. When you talk to him you feel that you are with a friend or a member of your family. Timothy is able to lead you in every step of the process. Good job Timothy."
  • " Bankruptcy is a private and personally devastating life event. Timothy Sierra and his assistant, Nancy, made the process as painless as possible. They kept in close contact via phone and email so I always knew what was happening in my case...."
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