Credit Card Debt Consolidation Vs Debt Settlement - How to Compare Them?

The majority of credit card debtors often fail in locating the right debt relief

program for them due to their inability to understand the uniqueness of each program. They must try to understand some basics of these programs in order to use them in their best interest as they are based on the government offered stimulus money. Why would you not take advantage of the benefits offered by these programs. If you are a credit card debtor and you are liable to pay more than $10,000 in unsecured debt then you can use a variety of debt relief programs without any worries or stress. In this article you will see the efficient comparison of two of the most effective and widely used programs regarding debt settlement and debt consolidation. Both of them are very beneficial for credit card debtors as they enable them to come out from the clutches of fierce debt.

In the debt consolidation program, all of your existing liabilities will be consolidated and reshaped in to one single loan so that the exact amount that is offered to you through which you become able to discharge all of your existing financial obligations at once. Through this method you have no need to repay the debt to multiple lenders with the variable rate of interest because as you will get one loan, it will be based on assets so you can say that it will collateralize and be offered with lower interest rates and it will have a fixed instead of variable rate which was expensive in previous cases. This loan will be offered for the shortest period of time so that you can easily repay it in just four to five years instead of ten to twenty years which was evident in the case of unsecured liabilities.

In the debt settlement program, you have to negotiate with your creditors and convince them that you financial position doesn't allow you to repay your liabilities any further and in the near future you are not finding any possibility to accomplish that goal. You must use the threat of bankruptcy to convince them, there are greater chances that you can get a reduction in your debt by even more than half of your liability amount so you can repay the remaining balance in a lump sum.

Debt settlement is a legitimate alternative to filing for bankruptcy. Most people are able to eliminate at least 50% of their unsecured debt when the process is complete. There are also other debt relief options available which is why it would be wise to speak with a debt relief specialist.

Credit Card Debt Consolidation Vs Debt Settlement - How to Compare Them?

By: Clyde Archer

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