subject: Credit Card Debt Consolidation - How Debt Settlement Compares To Consolidation [print this page] Credit Card Debt Consolidation - How Debt Settlement Compares To Consolidation
These days, most of the people seem upset for settling their debts. Most of the people often fail in settling their debts due to the fact that they fail in finding a legitimate and proper debt settlement company. It is also a fact that there are many people who do not understand the meaning of debt settlement. People must understand very well that they should be aware of the basics of all the programs which are working in the markets and must make full use of these programs.
Debt consolidation is one of the methods in which all the debts of a person are consolidated in a single loan. It enables a person to pay back the debt to a single lender rather than paying to multiple lenders. You will have to pay lower interest rates on the payment of these consolidated loans. Moreover, this loan will enable a person to pay his debt in minimum time period of five years instead of paying in twenty or more years.
In debt settlement, the debtor negotiates with his creditors and tells them that your financial condition is not good. It is that your financial position is not good enough to pay back all the debts of the credit cards. Moreover, it is that you don't even have any way to pay back your liabilities in the near future. On this basis, you need to settle your debt as soon as possible. At this stage, if they do not agree to settle your debts then you can use the threat of bankruptcy. This would be the point where creditors get agree to settle the debts of their debtor. In this way, you can also get reduction in your debts up to 50 to 60 percent. Rest of the amount is supposed to be paid in easy monthly installments or in a lump sum as per the person's own choice.
In the above article, we have tried to tell the basics of both the methods i.e. debt consolidation and debt settlement. Now it is up to you that which method you want to adopt.
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. Check out the following link to locate legitimate debt help in your state.
