Yes, I know, there are better words in the English dictionary than ‘bankruptcy”. But, not filing bankruptcy is even worse! Don’t believe me, let’s talk. My opinion has always been the same, Minneapolis, Minnesotan’s should err on the side of Minneapolis Bankruptcy. Debt consolidation sucks. Why? Well, there are numerous reasons why debt consolidation sucks, but here are three.
1. IT Makes Your Credit Worse
First, in debt consolidation, you are advertising to the world you are in financial distress and your credit score goes off a cliff. To me, when doing debt consolidation you are a walking bill board that you are in financial distress. Conversely, bankruptcy is quick and eliminates debt, improving your credit faster.
2. Any Debt Forgiven Is Taxable
Second, you must pay taxes on debt that is forgiven as a result of debt consolidation. Talk about kicking a person when they are down! In bankruptcy, debt that is forgiven is not taxable to you. That is because under the IRS definition of income there are exceptions for debts forgiven under Title 11 of the bankruptcy Code which includes Chapter 7 and Chapter 13. Debt forgiven in bankruptcy is not taxable!
3. It Takes Years, Bankruptcy Does Not
Third, debt consolidation programs can takes years and your credit looks like hell anyway. However, in Chapter 7 Bankruptcy, you are debt free in about four months. Picture yourself and another family suffering from 50k in credit card debt each. Let’s say one of you does a 6 year debt consolidation plan and the other files a Chapter 7 Bankruptcy. Who would you rather be? I would rather be the one to file the Chapter 7 Bankruptcy and be done and moved on with your life now not later!
Contact A Minneapolis Bankruptcy Lawyer
When the time is right or when you are ready, reach out to Minnesota’s highest google reviewed Minneapolis Bankruptcy Lawyers at Kain & Scott. You will be glad you did.
Kain & Scott, P.A.
100 South 5th Street #1900
Minneapolis, MN 55402