For a Chapter 7 Bankruptcy, creditors must stop trying to collect anything from you as soon as you file, but in most cases, the actual discharge takes place 6 months after you file.
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It is more advantageous to file a Bankruptcy, because 1) when you use a debt consolidation company, in most cases not all creditors will negotiate, and at the end of the debt consolidation program, there is often at least one creditor for whom you will still owe the entire debt; 2) the impact on your credit score will be similar for both debt consolidation and Bankruptcy; and 3) with a Bankruptcy you pay nothing to your creditors.
If you file a Bankruptcy, all your credit card companies will close your accounts. But you will be able to get new cards one year after you file. If you do debt consolidation, you will be able to keep any credit card that you continue to pay in full.
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