Should I Consolidate Debt or Should I Claim Personal Bankruptcy
Many consumers overspend and then have difficulty repaying their debt. This is exactly what this consumer has done and now is trying to figure out what the best option would be for him. He has stated that he has several options and none of them are really that great in terms of his financial issues or his personal life.
His options include filing for some form of bankruptcy, consolidating his loans, moving back with his parents and focusing on repaying his existing debt or just struggling through this difficult period. We do not have full access to all of his financial information and cannot determine what his cash flow is. It basically comes down to whether he has sufficient cash flow to meet all his monthly payments and be able t provide food and meet his rent plus utilities. If he cannot meet these obligations, even with serious cutbacks in discretionary spending, then he is going to have to fall back to consolidating his loans or declare bankruptcy.
One option which would improve his cash flow is to move back with his parents to avoid having to pay rent. He should still pay his parents something to cover the increased cost for them of him moving back home. Still he will save a great deal which can be applied to his monthly debt payments.
Secondly he should consolidate his debt with a low interest loan. Before making a commitment to this approach, he needs to evaluate and ensure that his monthly payments after consolidation will be less than what he is currently paying to improve his cash flow. Additionally, he needs to look at the cost of the loans to confirm that this makes sense. If the interest costs and fees are prohibitive, then he may want to look for additional options.
Finally even if he applies for bankruptcy protection, he will still need to repay his debt based on his income. He will have protection from his creditors which will also help him in terms of avoiding debt collectors etc. If he can repay this debt without declaring or applying for bankruptcy, his credit rating such as it is will be protected and may even improve once he has demonstrated that he can meet his debt obligations.
DEFAULT LOAN APPLICATION FOR BORROWER’S INFORMATION
Home/Mortgage Loan Amount :: $76,000
Home Loan Application and Processing Speed (when do you need the funds)::I am desperate and need to figure out if it is better to consolidate my debt or just claim personal bankruptcy
Do you currently have a mortgage? ::no, I rent and thinking about moving back with my parents
Bank Name and Branch ::Chase Bank, Ocean Blvd
What City/Town, State and County do you live in? :: Long Beach, California
What is your employment field? :: Wholesale Sales
Employment Position :: Inventory Manager
When are you paid? (monthly/weekly/biweekly):: Biweekly
Your credit rating to be – excellent, fair, or bad? :: Not very good
How did you find us? :: Looking for help with debt consolidation or bankruptcy services
How are you paid? (direct deposit/paper check):: direct deposit
Gross Amount Per Paycheck :: $1600
Do you agree to have this information published online, without your PRIVATE information of course? :: Sure no problem, maybe my question will help some other people
Extra information here please (some detail):: I am looking for help with my financial affairs. I owe $76 thousand in various amounts to credit cards, a car loan and personal loans. I got into this situation by living too large as they say and now I have to figure out what to do to repay all of this debt. I was ok until I started buying expensive things for my apartment, going on a couple of trips and generally spending more than I earn. The way I look at it, I have two choices. One is to declare bankruptcy and start over, although I am not sure if I can actually claim bankruptcy. The second approach is to move back with my parents and focus on repaying the debt that I have. This is not a great alternative, but then neither is the other one. They both have negative consequences.
Note to Lender :: I have a pretty good job as a warehouse manager and generate enough income to meet the payment requirements if I were to consolidate the debt that I have into one low interest loan. This is probably the best approach since I would be able to maintain the credit rating I have and perhaps even improve it over the life time of this loan
There is no equity to support a secured loan so what I really need is a low interest unsecured personal loan to make this work and would appreciate talking to someone about how to make this happen. If I have to declare bankruptcy, my credit rating will tank and this means I probably will not be able to find a lender in the future willing to lend any funds at reasonable interest rates.
This is a bit of a rambling note, however I would really appreciate your suggestions regarding the best approach to either consolidation my debts, bankruptcy and / or moving in with my parents until I can get my finances into a better situation.
|Category: Home Mortgage Loan||APR 4%||APR 5%||APR 6%|
|Length of Term||5||5||5|
|Amount to be paid||$83,725.22||$85,656.52||$87,587.83|
|Total interest paid||$7,725.22||$9,656.52||$11,587.83|
|Paid per installment||$1,376.30||$1,408.05||$1,439.80|