Consumer Credit Counseling Programs - Does Debt Settlement Make More Sense?

Consumer Credit Counseling Programs - Does Debt Settlement Make More Sense

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The availability of options to find solution to a problem is indeed a blessing but it can become a curse, when it becomes difficult to decide which one to go with. The debtors often find it hard to determine which program is best suited to deal with the issues that they are facing. In the midst of this confusion most often debtors opt for bankruptcy and they further slumps into another bigger problem. They overlook the fact that bankruptcy has dire consequences to it. First of all the process of bankruptcy is very lengthy and it involves a lot of paper work. The debtors first have to prove in the court of law that they are literally broke and have nothing to pay back the creditors. After declaring bankruptcy the debtor is considered disqualified for any kind of loan for the next decade. The news of bankruptcy is also made public that becomes the source of further embarrassment.

There are numerous Debt Relief programs available for the debtors to choose for settling their debts. Each program is designed to deal with a specific situation. The most popular among them is Debt Settlement; according to this Debt Relief program the debtor can get to settle the debt without having to pay the complete amount owed to the creditor legally. The creditor can cancel up to 60% of debt amount from payment. Since the amount is not paid back in full, despite the debt is considered settled, the debtor does get a negative entry into the credit history. In case the debtor makes 12 straight installments in time, the creditor award extra points to consolidate the effect of negative marking.

The debtor must always negotiate through a Debt Relief company with the creditors. These companies have experienced professionals and they strive to get the maximum relief for their clients. They explain the client's situation proficiently to the creditor and convince them to grant the maximum waiver to their client. These companies also provide free counseling services to their clients and in context of their debt to income ratio plan their payment schedules.

Debt settlement is a legitimate alternative to filing bankruptcy. Consumers can expect to eliminate around 50% of their unsecured debt with the help of a legitimate settlement program. With the new FTC laws recently passed in July 2010, debt settlement is a much less risky option. If they don't settle your balance you don't have to pay a dime.

Check out the following link for free help from a certified debt relief specialist:

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