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Bankruptcy vs. debt consolidation

A bankruptcy will destroy your credit. Most financial institutions will not even consider a credit application involving a bankruptcy for at least 3-5 years.

Americans are almost eight times more likely to declare bankruptcy than seek the services of a credit counseling agency. Last year, about 1.5 million Americans filed for personal bankruptcy while only 200,000 turned to credit counseling agencies. Credit counselors recommend bankruptcy only as a last resort when clients don't have to worry about consequences because there's no way to avoid them.

With a debt consolidation plan you will set yourself in motion to get out of debt. A lower monthly payment will make it more convenient for you to pay off your debt, thus relieving your daily financial and emotional stress.