If you think you are better off paying your debts through a debt consolidation program, you may need to carefully consider your decision.

Edrie Pfeiffer
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Edrie Pfeiffer, Bankruptcy & Divorce Attorney

A recent article posted on a site maintained by a credit card company purportedly discussed the differences between filing for bankruptcy and paying off debts through a debt consolidation program. Not surprisingly, it recommended paying off the credit card debt. There were several statements in the article that were not completely accurate. The author says that bankruptcy will cause the most damage to the credit report. However, a debt consolidation program may cause negative reporting on the credit report for years.

When you file a bankruptcy, the creditors may no longer post that payments are not being made or being paid late. Many times, when you work with a debt consolidation company, the creditors will report negatively every month during the repayment plan. In addition, you will not be able to begin rebuilding your credit until after you have completed the plan.

Most of my clients have debts besides credit cards that they need to have addressed, like medical bills or old cable or cell phone bills. Most debt consolidation programs will only work with credit card debt. In a Chapter 13 bankruptcy, you will be able to address all of your debts and make sure that you have a payment plan that will assist you to become completely debt-free.

If you are considering a debt consolidation program, you need to make sure that you have all the facts and not just the ones that someone in the credit card industry wants you to know. Contact Hampton Roads Legal Services at 757-276-6555 to schedule a free consultation so you have all the facts that you need before deciding what is the best method for dealing with your debts in Virginia.

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