Debt consolidation and bankruptcy represent 2 different strategies for debt management. To know more about the difference between them, as well as discover a safe and cheap bad credit merchant account, just keep on reading below.
Debt Consolidation vs Bankruptcy + Bad Credit Merchant Account
Did you know that the credit card debt of the average family carrying a balance makes up $15.094? So, it’s no surprise that the Federal Reserve reported a card debt record of $870 billion at the start of 2019.
Here’s the difference between debt consolidation and bankruptcy. Just have a look:
1. Debt Consolidation
This is a type of debt management strategy to cut the interest rate and reduce the monthly payment on credit card bills by gathering them into a single payment.
2. Bankruptcy
Aren’t you able to pay off your debt even at a lower interest rate or less monthly payments? If yes, bankruptcy might be a solution to consider. You can try either Chapter 7 or Chapter 13 bankruptcy options.
The former is also called “liquidation,” and has to do with selling off many of your assets for the purpose of repaying your creditors. The latter will allow for repaying your debts in 3-5 years.
To avoid major challenges on your way towards growth, it’s critical to work only with a respectable credit card processor and alternative online lender that can help you take your business to the next level with ease.
With a reputable merchant services provider, you can get fast and easily approved for the most secure and cheapest merchant services, including a bad credit merchant account.
Important Information to Know
When considering bankruptcy, many are interested in repaying certain debts before filing bankruptcy. Mostly, if you repay your debt within 3 months (or longer in certain cases) before filing the bankruptcy, the trustee can file the so-called “clawback suit” against the creditor to get the money back.
Debt consolidation can help you with:
- Making your monthly payments more effectively
- Reducing the interests, you pay
- Bettering your credit score
Bankruptcy can help you with:
- Staying away from headaches with creditors
- Eliminating all your outstanding debt
- Getting down to rebuilding your financial future
As you see, debt consolidation can turn your outstanding debt into a single, bigger loan. Bankruptcy provides federal protections for borrowers who aren’t able to repay their debt.
Author Bio: Michael Hollis is a Detroit native who now lives in Los Angeles. He is an account executive who has helped hundreds of business owners with their bad credit merchant account solutions. He’s experimented with various occupations: computer programming, dog-training, scientificating… But his favorite job is the one he’s now doing full time — providing business funding for hard working business owners across the country.