Finding a solution to overwhelming debt will help put you back in control of your life. Credit counseling, debt consolidation, and debt settlement are all good options for getting back on top of your finances. Filing bankruptcy may also be an option but should be considered as a last resort.
Looking for best solution to settle your debt
Some people believe that filing bankruptcy is the best solution. But, it really should be the very last option after trying all others. A bankruptcy on your credit report will follow you for long after and affect all of your financial decisions. Seeking debt consolidation and debt settlement is the best first course of action.
How Credit counseling and debt consolidation works
Credit counseling and debt consolidation are two terms that have pretty much become synonymous. Debt consolidation works as follows; If you have several different credit cards that you owe balances on and our having a difficult time paying them you can work with a debt consolidation service that will help you in two ways.
Debt consolidation company acting as a middle man to settle your debt
A debt consolidation company will act as a middle man between you and your creditors. They first thing they will do on is approach the creditors and try to negotiate a lower interest rate on your balance. This can save you a tremendous amount of money and keep your debt from mounting faster than you can pay it off. A debt consolidation company may also set up a payment plan so that you can pay all of the credit cards with one monthly payment.
Debt consolidation services have an established working relationship with the credit companies. This makes it much easier for them than it would be for you, to negotiate an arrangement. Setting up a payment plan makes it easier for you, the consumer, to pay down your debt.
Debt settlement service negotiations to lower your actual balance
Another option to consider is a debt settlement service. They work a little differently. A debt settlement service will negotiate with your creditors to lower your actual balance. If for example, you owe a credit card company $25,000, a debt settlement service may be able to get a percentage of your balance forgiven and reduce the debt to $15,000.
Credit card company
You may wonder why a credit card company would do this. It is to their advantage to make such an arrangement because they know that often if they insist on the full balance, it may force you to declare bankruptcy and then they would receive nothing. It is better for them to receive a percentage of the amount owed than nothing at all.
Seeking a professional service
These are the two most sought after debt solutions and can be done either by the consumer directly or through a company that specializes in either debt consolidation or debt settlement. It is advisable that the consumer seeks out a reputable professional service to help them manage their debt as opposed to trying to do it on their own.
Verifying the debt solutions company
Verify the debt solutions company you are considering with the Better Business Bureau (BBB) and do not hesitate to ask questions. A reputable company will keep you well informed of each step in the process.
If you are getting a challenge on how to settle your debt, go for debt consolidations company that is near you, and you’ll never regret because of the excellent service that you’ll encounter while paying your debt.
- Alex H Frey, Alex Frey, Ivy Bytes
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Last update on 2017-02-21 / Affiliate links / Images from Amazon Product Advertising API