Debt consolidation allows you to consolidate your credit card debt into one payment.  Typically a company will look at your debt, income and expenses, and create a payment plan for you. Debt consolidation will NOT include your finance companies, cash advances, medical bills, or various unsecured debt.  As you make payments to the company, they will hold the money and eventually disburse to the creditors. Creditors do not have to agree to the amount sent from the debt consolidation company.  Litigation does NOT stop. Creditors can still continue to sue you and possibly get a judgment against you.

Bankruptcy is a benefit provided to you by Federal Law. Chapter 13 bankruptcy allows you to consolidate ALL of your debt. You must list everyone you owe in a bankruptcy. You include taxes, medical bills, collections, charged off accounts, credit cards, furniture payments(not leases), car payments, mortgage arrears, finance companies, cash advances and all your unsecured debt.  You can pay back your unsecured debt as low as 1 percent. Your ability to pay is a part of how much you pay back to your unsecured debt. ALL civil litigation stops once you file. Bankruptcy creates an automatic stay that stops litigation, foreclosures, repossessions, tax garnishments, and harassing creditor phone calls!