Is debt consolidation considered the same as bankruptcy?

I%26#039;m considering consolidating my debt with the consumer credit counseling agency in my town but someone told me that it%26#039;s considered (i guess by potential creditors) the same as filing bankruptcy? Is this true?

Is debt consolidation considered the same as bankruptcy?
Not at all. When you declare Bankruptcy, you aren%26#039;t paying back your debt. With Debt Consolidation, you are doing the right thing and paying back your debt.





It might bring your credit score down a bit and the cards in consolidation will be frozen.





Be careful you choose a reputable debt consolidator. Trying going on Suze Orman%26#039;s website, she gives great tips.
Reply:You can visit http://www.cashguru.info and find very useful tips and several articles on debt consolidation. Report Abuse

Reply:Get valuable tips on debt consolidation from http://moneymentor.cashmatter.... . It%26#039;s a very useful website. Report Abuse

Reply:Debt consolidation occurs when you take out a loan to pay out a number of smaller debts.


What you%26#039;re considering is %26quot;Credit Counseling%26quot; which lenders look as needing help with debt management because you can%26#039;t manage it on your own.





Lenders see this as a poor risk situation perhaps not as bad as bankruptcy but not a whole lot better.
Reply:no, it%26#039;s not at all the same.





While enrolled in the program you will not be seeking out new credit, so it doesn%26#039;t matter what potential creditors think. When I did mine, as soon as I completed the program (paid off the debts I needed to), all references to the program were gone from my credit report.





I highly recommend CCC agencies when you need them. It%26#039;s a light at the end of a tunnel and you%26#039;ll be surprised how quickly you start to get your head above water. Good luck!
Reply:the simple answer is yes . its pretty tough to get from under that one . my advise is do not consoladate your credit its as bad as not paying also as a credit specialist i can tell you that i can teach you how to repair and negotiate with the companies your own settlements and payments the key is that when you arrange payments that the crdit company reports you as positive not negative . you want to preserve your credit rating and at the same time pay them little by little . if you go to these companies THEY WILL NOT preserve your credit rating they will bring it down and it will show on your credit report as you being in credit distress. email me if you are interested in me helping you fix and arrange payments to preserve your credit and have the credit card companies report your dept as PAID AS AGREED wich gives you a good credit score good luck achef22@yahoo.com
Reply:They are different.
Reply:nope...they both are different, debt consolidation is better than bankruptcy





Combination of various high interest loans into a single one, it is called debt consolidation. The aim behind debt consolidation is to reduce the payments or the interest rate. You make a single payment toward the loan instead many payments each month. This reduces your financial burden and you can have surplus cash left over. Credit counseling services offer debt consolidation loans. Check out the credentials of the credit counselor and find out if they are authorized by the government.
Reply:They are not the same. Bankruptcy will do much more damage to your credit score and will stay on your credit report for up to 10 years.





Credit counseling and debt consolidation can help, if done properly, but you can negotiate with your creditors yourself.





You can probably avoid bankruptcy by simply calling your creditors, because they are often very open to working with consumers that are sincere about settling their debts.





Your creditors really want to hear from you, because they are well aware of the effects of bankruptcy.





If you file Chapter 7, your creditors get absolutely nothing (although it%26#039;s tougher to qualify for Chapter 7 because of the new laws). If you file Chapter 13, they will only get on average 25 to 50% of the amount owed, but that will be stretched out over 5 years.





Most will be willing to work with you, but you need to have a good plan of attack before you make contact with them. I’ve included a link to a free resource that can give you a little more guidance.





I hope things work out.