Why Bankruptcy May Not Be the Best Option for Debt Relief in Victoria

by | Dec 15, 2022 | Finance

The first thing that often comes to mind when considering debt relief in Victoria is bankruptcy. Unfortunately, filing bankruptcy can make it more challenging to recover and achieve good financial standing. The good news is that there are alternatives for debt consolidation, including consolidation loans for bad credit. The following explains why filing for bankruptcy shouldn’t be your first choice.

Most Debts Are Secured Debts

Bankruptcy is designed to clear unsecured debts, such as credit cards and loans that aren’t tied to physical items. If you have car loans or other secured debts that are causing problems, bankruptcy will cause you to lose these belongings. Using debt consolidation will ensure you can keep your items while paying off the debts in lower monthly payments.

You Have Co-Signers

If you had poor credit before getting into debt, you likely had someone co-sign your loans. If you file bankruptcy on these loans, the co-signer becomes responsible for the debt instead. By using debt relief programs in Victoria, you will still be making payments toward the debts, giving your co-signer peace of mind.

Bankruptcy Is Expensive

Many people see bankruptcy as a way out of debt but don’t realize it costs money to file. You often have to hire an attorney and pay fees to file for bankruptcy. If you can’t afford to make payments on your debts, you can’t afford to pay for bankruptcy either.

Your Job Depends on It

Some jobs look down on bankruptcy. Filing can result in losing your job and potentially struggling to find a new one. If you work in an occupation that takes finances seriously, debt consolidation is often a better solution.

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