Debt Education Center: Bankruptcy

<< Back to the Education Center

What is the difference between bill consolidation and bankruptcy?
Simply put, bill consolidation means combining all of our outstanding debts and loans into one single bill consolidation loan. Ideally, the interest rate of this resulting bill consolidation loan will be lower than at least some of your original debts and loans, giving you the opportunity to make one single payment at a reasonable interest rate. Bankruptcy on the other hand is a process designed to eliminate existing debt or repay debts under governmental protection. There are two basic types of bankruptcy – Chapter 7 and Chapter 13 bankruptcy.