Non Profit Credit Card Consolidation Versus Debt Settlement
When it comes to choosing between non profit credit card consolidationand debt settlement
to solve your financial problems, the best solution for you will depend on several variablesand one individual's financial status can be quite different from that of his next-door neighbor. If you are trying to choose between these two options, the guidelines that follow are intended to help you make that decision.Consider how much you can afford to pay. As a rule, a credit counseling program will cost more than a debt settlement program in regard to the established monthly payment because it is linked to prevailing interest rates. At the same time, debt settlement may enable you to resolve the issue by paying less than the full amount you owe.
Before you opt for debt settlement, you should also be aware that taking this step may have a negative impact on your credit rating, provide the incentive for calls from collection agencies, and prompt your creditors to initiate litigation. Of course, none of this means that your case cannot be settled successfully
.
Note that a credit counselor may be quick to tell you that your credit score will not be lowered if you deal with them, but taking this action will still become part of your credit report. If you find it impossible to pay off your debt without the help of a third party, then credit counseling is the proverbial "lesser of two evils."
Your list of creditors will also help determine what you should do. If one of your creditors is extremely aggressive, then credit counseling or even bankruptcy may be your best alternative, as opposed to debt settlement. In regard to credit counseling, many creditors deny interest-rate concessions to anyone who signs up for a debt management program, and you will need to discuss this with your credit counselor beforehand.
Your personality type is also a factor in making this decision, and debt settlement involves a certain amount of risk that you must be prepared to handle. For example, the amount of the settlement may not be what you expected, some creditors may refuse to become part of the program, and you will also receive a number collection calls as you venture into this unfamiliar territory.
Many other factors will determine whether credit counseling or a debt settlement program is the best choice for you, such as the source of your income or your state of residence. With this in mind, you will want to seek some professional advice before making a final decision. It's also important to beware of credit card consolidation scams.
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Non Profit Credit Card Consolidation Versus Debt Settlement
By: Brad Harrison