Credit Card Debt Relief Options - Credit Counseling Vs Debt Settlement Companies

Credit Card Debt Relief Options - Credit Counseling Vs Debt Settlement Companies

Perhaps we all know that there are several credit card debt relief options available. Since not all consumers are experts in financial fields, it can be easily said that millions of people fail to understand the difference between the various relief options. This article tries to help the consumers by comparing two different approaches. One is credit counseling and the other being debt settlement companies.

To start off, it is worth saying that do not mingle up credit counseling with a relief method. Credit counseling is the first stage of any relief method. Here the consumer speaks with a counselor who knows all the methods of debt relief in details. The counselor asks for all the details from the consumer and then analyzes the situation. Based on the status of the debt, the income options and the expenditure pattern of the consumer, the counselor advises the consumer of the best relief method that suits the situation of the consumer. The advised method of debt relief can be anything. It can be bankruptcy, debt settlement, debt consolidation or even debt management. Whichever fits the consumer's situation will be advised.

The debt settlement companies are not counselors. Once a consumer walks in, the companies will know that the minimum debt that the consumer has is $10k and that the consumer wants a negotiation with the creditor for elimination of at least 50% of the debt that he or she has. A settlement company will assign the job of negotiation to a negotiator who will negotiate with the lender and eliminate at least 50% and often up to 70% of the debt that the consumer has. The negotiator will use the threat of bankruptcy to achieve this goal and will thereby help the consumer to walk out of the debt troubles and lead a simple but financially healthy life.

Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement.

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