subject: Credit Card Debt Settlement Vs Debt Consolidation - A Debt Relief Comparison [print this page] Credit Card Debt Settlement Vs Debt Consolidation - A Debt Relief Comparison
At the rate at which we use our credit cards nowadays, it's no wonder that a large percent of people have found themselves in some serious debt, with few options to get out of it. So how about we look at two of these options, namely debt settlement and debt consolidation, so you can figure out which one is best for you.
Debt consolidation is a great solution for those with debts lower than ten thousand dollars, who can no longer afford to pay back their monthly rate, or for those who just don't want to spend the next thirty years paying off credit cards. It works like this: you take out another loan, usually from government money, called stimulus money, to pay back your credit card debt and are then left with the loan. This is actually better than it sounds, since the interest rate for a loan is much lower than simply paying off the credit card, and you'll be able to pay it back a lot faster that with the credit card.
Financial settlement, on the other hand, is for those with a debt of at least ten thousand dollars or more, who simply cannot afford to pay it back in their current situation. As a result, you hire a negotiation company to sit down and talk to your creditors, explaining that it would be far better for both parties if they were to shave off some of the debt. This method usually gets you a reduction of fifty to sixty percent of your debt, not to mention it saves you a lot of time in dealing with both creditors and collectors. In the end you'll end up with a two or three years period in which you have to return the remainder of the debt and a credit score that can, over time, be improved.
It's up to you to choose the best solution, but it's advisable that you do so after having consulted professionals from both sides, in order to better understand both the advantages and the risks you're facing. You'll see that you'll soon get rid of all your debt if you stick to your plan.
Debt settlement is a legitimate alternative to filing bankruptcy and often makes sense for consumers on the verge of bankruptcy. There are also other debt relief options available so it would be wise to speak with a debt relief specialist to go over your different options. For a free consultation from a debt relief specialist in your area check out the following link:
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