Debt Settlement VS Debt Management
There are many debt relief options available to help you pay your loan. One of the two common debt relief options is debt settlement and credit counseling.
Credit counseling is a method that includes offering education to consumers about how to avoid encountering debt. They could also help you find a workable solution to financial problem. One help that credit counseling agency can provide is reduced interest rate. The second advantage is the credit company will disperse the payment for the creditors for you so you don't have to worry much on multiple payments. Instead of just trying to pay for the minimum the credit counselor, will help you settle for a fixed payment plan that will definitely help for a faster payment process.
Another debt relief program is debt settlement; this a process in which the debtor will negotiate with the creditor or collection agency to reduce actual credit balance. This is a good option if you already missed many payments and could no longer settle your monthly bill. If a good settlement is reach, your debt can be reduced to up to 40 percent.
The major difference between the two debt relief programs is the savings. With credit counseling you will need to pay the whole loan, its only the interest that is reduced. With debt settlement as mentioned 40 to 60 percent could be reduced from the outstanding balance; those are big difference. In addition, since debt is greatly reduced debt settlement is faster compare to debt counseling. Debt settlement usually last for 2 to 3 years while debt counseling can last for more than 5 years The good thing though with debt counseling your account will still be in current status while in debt settlement your account will be on default, which affects credit score.
Many credit card holders are now in the point of bankruptcy because of accumulated unpaid debts. If you are thinking of filing for bankruptcy, you might want to look first at some debt relief programs that could help you to get out of the financial predicament. Just make sure to find the most reputable people and company to deal with so that you will not be victims of fraud.
Credit counseling is a method that includes offering education to consumers about how to avoid encountering debt. They could also help you find a workable solution to financial problem. One help that credit counseling agency can provide is reduced interest rate. The second advantage is the credit company will disperse the payment for the creditors for you so you don't have to worry much on multiple payments. Instead of just trying to pay for the minimum the credit counselor, will help you settle for a fixed payment plan that will definitely help for a faster payment process.
Another debt relief program is debt settlement; this a process in which the debtor will negotiate with the creditor or collection agency to reduce actual credit balance. This is a good option if you already missed many payments and could no longer settle your monthly bill. If a good settlement is reach, your debt can be reduced to up to 40 percent.
The major difference between the two debt relief programs is the savings. With credit counseling you will need to pay the whole loan, its only the interest that is reduced. With debt settlement as mentioned 40 to 60 percent could be reduced from the outstanding balance; those are big difference. In addition, since debt is greatly reduced debt settlement is faster compare to debt counseling. Debt settlement usually last for 2 to 3 years while debt counseling can last for more than 5 years The good thing though with debt counseling your account will still be in current status while in debt settlement your account will be on default, which affects credit score.
Many credit card holders are now in the point of bankruptcy because of accumulated unpaid debts. If you are thinking of filing for bankruptcy, you might want to look first at some debt relief programs that could help you to get out of the financial predicament. Just make sure to find the most reputable people and company to deal with so that you will not be victims of fraud.
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