Debt Consolidations Vs Debt Settlements - When You Should and Should Not Use Them

Author: Eri k stump

Author: Eri k stump

Americans everywhere are drowning in debt and seeking ways to decrease or delete what is owed. Homeowners are losing their homes due to foreclosure, many due to a result of income loss or decrease. If they manage to avoid foreclosure many are still forced into bankruptcy due to the bottomless pile of credit card debt. There are agencies advertising relieve from debt, bankruptcy avoidance and on and on. In reality a majority of these so called way outs do nothing but add to the financial miseries many are already experiencing. There are basically two different varieties of programs that promise to help with debt problems, they consist of debt settlement or debt consolidation. Though these programs may sound like they offer the same benefits, they differ in the methods used. A debt consolidation is a program established to reduce the current payment of your accounts through a negotiation with lenders to lower the current monthly payment. The agreement is made with all of the current lenders of the unsecured debts and put together into one lump "consolidation". The borrower then pays the one payment to the agency handling the account who will in turn make a payment to each of the lenders in the consolidation agreement. There are drawbacks to a loan consolidation program including the unsecured debt is pushed over to the secured debt, which is normally the property owned. Also if the payment is late, there is a risk of losing the property as this is now in the secured debt. There are also usually a consolidation fee added to the monthly payment. A program designed for debt settlement is used to form a negotiation with the lenders to lower the cost of the current balance through a settlement. There are some agencies able to reduce the balance a tremendous amount, some as much as seventy-five percent (75%). It is important to note that many of these program agencies charge a large fee to contact the lenders and make arrangements for you and many of the lenders do not want to pay the agency fee for their services. Most credit card companies will work with individuals outside of hiring an agency. When credit card companies are offered a settlement in full, especially if the balance is past due, they will compromise a settlement with the individual. Before making a commitment to an agency, do your homework, research your options and you could possibly significantly reduce your credit card debt by simply doing your own leg work and negotiations. If you want to get out of debt and hire a debt settlement company for debt negotiation then I have an important piece of advice. Do Not go directly to a particular debt settlement company but rather first go to a debt relief network who is affiliated with several legitimate debt companies. In order to be in the debt relief network, the debt settlement companies must prove a track record of successfully negotiating and eliminating debt. They must also pass an ethical standards test. Going through a debt relief network will ensure that the debt company you are provided with is a legitimate and respected company. This is the most efficient way in finding the best debt settlement companies and increasing your chances of eliminating your debt. FreeDebtSettlementAdvice.com is one of the largest and most respected debt relief networks on the marketplace today. To find a debt settlement company through FreeDebtSettlementAdvice.com check out the following link: Free Debt Advice About the Author:

debtreliefemergency.com is a matchmaker in the debt settlement industry. They have paired up thousands of consumers up with debt settlement companies who are most likely to get consumers the best deal.

http://www.debtreliefemergency.com/

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