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The Path to Debt Relief - What Are Your Options?

by ketty archer

posted in Finance

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When you have debts piled up, you have the option of taking up one of the two methods for clearing them as soon as possible. You can either go for debt settlement or for credit counseling. Both of them are effective in their own way.

Credit counseling has its pros and cons. You can benefit by getting your interest rates reduced. It, of course, will vary from creditor to creditor but you will surely have a decrease in the rate of interest.

The next thing is that you will only have to make one payment per month. You will only pay the credit counseling company and they in turn will pay to your lenders.

Another thing that plays out to your advantage is that with a credit counseling program, you will be able to pay off your dues faster than if you had paid minimum amounts. You pay a sum of money to the credit counseling company for the entire time that you are in the program and this amount is fixed.

The cons would be that, when the credit card companies tell you that they have cut down your payments, it is not really so. Of course, they can cut down the interest rate but the payment will be almost the same as the minimum.

There is also a 75% failure rate among the people who enroll for these programs. This happens owing to the fact that the credit counseling programs can remove you from the program if you miss even one payment.

Debt settlement programs allow you to reduce the actual money that you owe to your creditors and not the rate of interest. The lenders negotiate only after your account goes into default.

There are certain benefits of this program. You pay far less than the actual balance and thus you pay off your liabilities faster. Debt settlement programs are the fastest way of clearing the accrued amounts.
The down side is that you will have a bad credit score due to the bad remarks on your credit report.

Debt settlement companies are widely available in just about every state however some are just flat out more experienced than others in debt negotiation. That's why it's so important for consumers to use debt relief networks. These networks qualify and only accept the best performing debt settlement companies.

About the Author:

www.debtreductionexpert.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.debtreductionexpert.com

contact us for free debt advice = 8884442820

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