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Bankruptcy vs. Debt Consolidation

The Senate approved legislation that makes it more difficult for individuals to wipe out their debts with the one sweep bankruptcy alternative. Debtors judged able to repay some of what they owed from Chapter 7 bankruptcy may have to do just that. It was said that reforming the bankruptcy system will help promote greater personal responsibility to paying off debts.

Obviously this will put a lid on those able to pay off debt and manage to exploit the system. But what of those who have gone through an endless series of unforeseen occurrences from layoff - to illness - to loss of family provider? Fact is even the ancients were released from their debt and servitude after seven years. This promoted good will and hope of recovering economic and social status while reducing stress, homelessness and needless criminal acts.

Yet there are factors that indicate today's bankruptcy allowances may be over-rated as a release from a bad financial situation.

Many who have lived with the stigma bankruptcy leaves admit to walking from one problem to another. After 10 years have passed and the agreed debt has been paid, the residue from bankruptcy still lingers on. Even after discharge many face denial by financing companies or have trouble getting credit approval at a desired rate. In addition employers often check a potential employee's credit standing and of all things, even a decent wage job opportunity can be denied. All things considered, one should give serious thought to the pros and cons of bankruptcy before signing the dotted line. At most, it's best considered the very last resort.

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