Debt negotiation and credit counseling are the two best personal debt relief options.
Both of these personal debt relief options have the ability to provide relief and better future to its consumers.
The process, practice, advantages and disadvantages of these two methods are different from each other.
In this writing we will compare these two methods.
If you have to choose between these two methods then you should be aware of the characteristics of these methods and the selection of any of these methods is totally dependent on your current financial situation.
To become eligible for using debt settlement method; you should default on your credit installment payments, you should not have enough money to compensate your creditors, you must accrue more than $10,000 as loan amount and you should have the willingness to file for insolvency if your lender is not allowing you to use this method.
On the other hand in the case of credit management you should accrue less than $10,000 as loan amount, you should have the ability pay the entire liability amount.
The processes of both these techniques are completely different.
In debt negotiation you have to negotiate for discount on the accrued amount.
The negotiation step can be completed by you or the negotiation company you have hired.
You can even negotiate for lower interest payment and extra time period so you can easily repay the remaining accrued amount.
After all these relaxations you pay the entire liability amount in installments and gain relief.
In the case of credit counseling you hire a counseling service provider.
They provide you with a single loan amount and the interest rate; you were previously paying is discounted by 25% and then you pay the loan amount through monthly installments.
You no longer have to pay to more than one creditor and you do not have to keep a check on the deadlines as the counseling services do this work for you.
The advantages of liability settlement is that you do not end up paying the entire liability amount and gain relaxation.
You do not face difficulties while locating a settlement firm; you credit ratings are not very negatively affected and you remain secure from the downsides of insolvency.
In the case of credit counseling; the advantages are: your credit scores remain intact and you can relief from paying different credit bills to different creditors and now you make only one single monthly payment.
Both of these personal debt relief options have the ability to provide relief and better future to its consumers.
The process, practice, advantages and disadvantages of these two methods are different from each other.
In this writing we will compare these two methods.
If you have to choose between these two methods then you should be aware of the characteristics of these methods and the selection of any of these methods is totally dependent on your current financial situation.
To become eligible for using debt settlement method; you should default on your credit installment payments, you should not have enough money to compensate your creditors, you must accrue more than $10,000 as loan amount and you should have the willingness to file for insolvency if your lender is not allowing you to use this method.
On the other hand in the case of credit management you should accrue less than $10,000 as loan amount, you should have the ability pay the entire liability amount.
The processes of both these techniques are completely different.
In debt negotiation you have to negotiate for discount on the accrued amount.
The negotiation step can be completed by you or the negotiation company you have hired.
You can even negotiate for lower interest payment and extra time period so you can easily repay the remaining accrued amount.
After all these relaxations you pay the entire liability amount in installments and gain relief.
In the case of credit counseling you hire a counseling service provider.
They provide you with a single loan amount and the interest rate; you were previously paying is discounted by 25% and then you pay the loan amount through monthly installments.
You no longer have to pay to more than one creditor and you do not have to keep a check on the deadlines as the counseling services do this work for you.
The advantages of liability settlement is that you do not end up paying the entire liability amount and gain relaxation.
You do not face difficulties while locating a settlement firm; you credit ratings are not very negatively affected and you remain secure from the downsides of insolvency.
In the case of credit counseling; the advantages are: your credit scores remain intact and you can relief from paying different credit bills to different creditors and now you make only one single monthly payment.