Options For Debt Relief - Debt Settlement Vs Credit Counseling
Options For Debt Relief - Debt Settlement Vs Credit Counseling
When in debt you have probably heard about debt relief options, but you may not have enough information to choose the best one. Debt relief options are alternatives to bankruptcy that can help you clear your debt by reducing interest rates or the amount you owe. Whatever the reason you end up in debt you can start clearing it now and go back to the life without stress you used to have.
Which debt relief option is the best for your problems? Where should you turn to find the best companies? What to do after you opt for a debt relief option? Well, let's find out.
The most popular financial relief options are debt settlement and credit counseling. One of them uses negotiations as a way to help consumers clear debt and the other one helps consumers prevent future debt.
Debt settlement can help you clear your debt once it reaches 10,000 dollars. Unsecured debt can be settled on with the help of some good negotiations. Once you hire a debt settlement company they will begin to persuade your creditor into reducing the total amount you owe on the basis that you can't afford to pay back the whole amount and that you will be forced to file for bankruptcy if they don't agree with the deal. It is not long since your creditor accepts to reduce your debt by 50-60% and also reduce the interest for the rest of the payments.
But why clear your financial troubles when you can prevent them? It is always better to try to fix a problem before it occurs, this way you avoid any damage that it may cause. Debt counseling is a way that the government offers help to consumers and educates them on ways to prevent incurring debt. This usually involves a management plan after some negotiations are done with the creditor.
A debt management plan helps a consumer repay his debt by working out a way to do so with the creditor. The result of this option usually involves lower interest rates, fees and other penalties, thus leading to smaller payments overall.
The choice is yours: debt settlement or counseling?
Debt settlement is a legitimate alternative to filing bankruptcy and often makes sense for consumers on the verge of bankruptcy. There are also other debt relief options available so it would be wise to speak with a debt relief specialist to go over your different options.