Even though you put a large portion of your income toward debt repayment each month, your debt balances keep getting bigger. Every time you pay off a BNPL purchase, three others appear in its place because you have no other way to pay for necessary items. Is it really worthwhile to pay the minimum payment on your maxed-out credit card each month, knowing that next month the interest charges will put it right back over the credit limit? Should you shift your strategy to saving up for a bankruptcy filing? Isn’t bankruptcy just for people who can never repay the debts they owe, no matter what they do?
That does not really describe you; you are just holding out until you can get enough high-paying gigs or, better yet, a salaried job so that you no longer have to spend your time on low-paying gigs. You are just waiting for the court to start garnishing your ex-spouse’s pay so you can get some of the money in overdue child support that your ex owes you. Maybe all you need is one more loan to keep you going until better times. Besides, what will happen to your credit score? Before you decide whether your next move should be a debt consolidation loan or a bankruptcy filing, contact an Oakland bankruptcy and your credit lawyer.
Playing the Long Game
Filing for bankruptcy protection can discharge some of your debts so that you have money left to pay others. Meanwhile, a debt consolidation loan gives you an influx of money so that you can pay off some of your debts, but then you will have to pay off the loan, albeit at a lower interest rate than the debts you used it to discharge. Both are only temporary fixes; they can help you discharge or repay old debts, but they cannot protect you from future debts, and unless you marry money or invest in the next economic boom, you will probably need to borrow again at some point in the future.
Likewise, both options cause your credit score to get worse before it gets better. With a debt consolidation loan, your credit report will reflect that you recently borrowed money and that the total amount you owe is considerable. When you use it to pay off other debts, though, your credit score will improve, and it will improve even more as you make payments on the loan. Chapter 7 bankruptcy will discharge your eligible debts quickly, but the bankruptcy filing will remain visible on your credit report for the next ten years. You may need to rebuild your credit from scratch, starting with secured loans in small amounts.
Contact the Law Office of Melanie Tavare About Debt Relief Solutions
A bankruptcy lawyer can help you decide whether a bankruptcy filing or a debt consolidation loan is a better solution in your situation. Contact the Law Office of Melanie Tavare in Oakland, California, or call (510)255-4646 for a free case evaluation.
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