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Chapter 13 bankruptcy or debt consolidation?

Credit card debt can quickly add up. A new skirt here, dinner out there, and the end result can easily be hundreds of dollars in unplanned purchases. This on top of minor financial set-backs, and the average Kentucky consumer suddenly finds himself or herself thousands of dollars in debt. For some, budgeting is the answer; however, others will need to look at more extensive measures such as debt consolidation or perhaps Chapter 13 bankruptcy.

For those families who carry credit card balances, those balances over the past year averaged over $16,000. With interest rates in the double digits, the likelihood of paying off this debt without incurring astronomical interest is low. Thus, it is usually in one's best interest to look for ways to eliminate this debt.

One option is to consolidate debt. This can be done by transferring balances to a zero percent interest credit card or through a debt consolidation loan. A zero percent interest card typically does charge a transfer fee, and the zero interest is only good for a certain number of months. If the balance can be paid during this time period, this may be a good idea. A debt consolidation loan generally charges a lower interest than credit cards; however, one must also qualify for this type of loan.

Sometimes, the solution that makes the most sense is to file for Chapter 13 bankruptcy. This type of bankruptcy allows the individual to establish a repayment plan that works within his or her budget. Then, after the three- to five-year repayment period, the majority of remaining debts are discharged. An experienced bankruptcy attorney can assist the Kentucky consumer in determining which option is best.

Source:, "Keys to successful debt consolidation", June 15, 2017

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Law Office of Ginger C. Cord, PSC
155 E. Main Street
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Lexington, KY 40507

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