Michael J. Culkin Law Office

The potential problems of debt consolidation

Large medical expenses, a divorce or a lost job can all force responsible spenders into a situation where they need to carry debt to make ends meet. These debts can sometimes snowball into a situation where the debt begins to feel unmanageable.

In these situations, people look for services to help them deal with their debt. One service that is often pursued is debt consolidation.

Consumer debt levels highest in a decade

If you've taken out a loan to make a major purchase recently, you're probably not alone. Consumer debt is at its highest level in a decade following the recession in 2008, according to New York Times. Although debt and recession aren't usually used positively in the same sentence, a high-level of consumer debt actually signals confidence in the economy today.

While this is a good sign for the economy overall, the implications of debt at the household level can vary from family to family. Financial experts quoted in the Times do warn that debt can have its downside too.

Chapter 7 vs. 13 Bankruptcy: What's the difference?

As families move through their lives, debt may start to build up from late credit card payments, unexpected medical bills or other sources. When that debt becomes overwhelming, families may turn to bankruptcy as a form of relief.

Two of the most common forms of bankruptcy are chapter 7 and chapter 13 bankruptcy. Here are the differences between them and how they can benefit you if you are facing large amounts of debt.

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