Examining the options of debt settlement vs debt consolidation is critical to regaining financial freedom.
If your bills are piled high and you are having a difficult time making your payments, you are probably considering filing for bankruptcy.
However, is this really something that you should be doing? In other words, are there options available to you other than bankruptcy? This is an important question to answer because filing for bankruptcy will have a serious impact on your finances.
Additionally, it will remain on your credit rating for a decade.
And, as previously mentioned, filing for bankruptcy may not even be necessary as debt consolidation and debt settlement would be a much better option to explore.
Understanding the differences in debt settlement vs debt consolidation will allow you to make the proper decision in terms of which methods to select.
In terms of debt settlement, this refers to offering a lump sum payment that is a portion of the debt owed.
Upon receipt of the lump sum payment, the creditor will close out the account.
For example, someone who owes $6,000 on a credit card will pay $3,500 in cash to close out the account, and the creditor agrees to that negotiated amount to consider the account paid.
Now, why would a lender accept a lump sum payment? Basically, if the consumer is moving towards bankruptcy, the negotiated lump sum payment would probably yield a greater payment than what would be acquired after a bankruptcy filing.
The lenders understand this and that is why they will be open to a settlement.
This is particularly true when the settlement may be the best offer they receive.
A debt consolidation program can involve working with a debt management service.
The debt management service will negotiate lower monthly payments and interest rates.
Then, it will issue payments to your credit cards and then send you one bill per month for its services which will be less than you regular monthly fees.
Through this process, you may end up getting out of debt far sooner than you would have if you had not worked with the debt management firm.
So, when looking at debt settlement vs debt consolidation, a question will be raised as to which one is the better method.
Basically, the answer to this will be based on your personal financial situation.
Since debt consolidation does not negatively impact credit like a debt settlement program, many will opt for the consolidation method prior to making a settlement.
However, a debt settlement plan will end the problem as soon as the payment is sent.
Those looking to make their debt situation a thing of the past will discover this is the much better method.
In the final analysis, weighing debt settlement vs debt consolidation is a much better strategy than looking into filing for bankruptcy.
Bankruptcy comes with many severe complexities and avoiding filing for bankruptcy is a much better option.
Since many people do not realize this, they will seek bankruptcy protection not realizing the major problems that can result from it.
As such, exploring settlement and consolidation options is advisable.
If your bills are piled high and you are having a difficult time making your payments, you are probably considering filing for bankruptcy.
However, is this really something that you should be doing? In other words, are there options available to you other than bankruptcy? This is an important question to answer because filing for bankruptcy will have a serious impact on your finances.
Additionally, it will remain on your credit rating for a decade.
And, as previously mentioned, filing for bankruptcy may not even be necessary as debt consolidation and debt settlement would be a much better option to explore.
Understanding the differences in debt settlement vs debt consolidation will allow you to make the proper decision in terms of which methods to select.
In terms of debt settlement, this refers to offering a lump sum payment that is a portion of the debt owed.
Upon receipt of the lump sum payment, the creditor will close out the account.
For example, someone who owes $6,000 on a credit card will pay $3,500 in cash to close out the account, and the creditor agrees to that negotiated amount to consider the account paid.
Now, why would a lender accept a lump sum payment? Basically, if the consumer is moving towards bankruptcy, the negotiated lump sum payment would probably yield a greater payment than what would be acquired after a bankruptcy filing.
The lenders understand this and that is why they will be open to a settlement.
This is particularly true when the settlement may be the best offer they receive.
A debt consolidation program can involve working with a debt management service.
The debt management service will negotiate lower monthly payments and interest rates.
Then, it will issue payments to your credit cards and then send you one bill per month for its services which will be less than you regular monthly fees.
Through this process, you may end up getting out of debt far sooner than you would have if you had not worked with the debt management firm.
So, when looking at debt settlement vs debt consolidation, a question will be raised as to which one is the better method.
Basically, the answer to this will be based on your personal financial situation.
Since debt consolidation does not negatively impact credit like a debt settlement program, many will opt for the consolidation method prior to making a settlement.
However, a debt settlement plan will end the problem as soon as the payment is sent.
Those looking to make their debt situation a thing of the past will discover this is the much better method.
In the final analysis, weighing debt settlement vs debt consolidation is a much better strategy than looking into filing for bankruptcy.
Bankruptcy comes with many severe complexities and avoiding filing for bankruptcy is a much better option.
Since many people do not realize this, they will seek bankruptcy protection not realizing the major problems that can result from it.
As such, exploring settlement and consolidation options is advisable.