Debt Settlement Vs Debt Consolidation – Which is Better For Your Particular Financial Situation?

Debt settlement is one of the great debt relief options available that comes as an alternative to bankruptcy. I am sure you have heard of it because it has become very popular in 2010 and it is the choice of many consumers in debt and that can't afford to pay it back without this crucial help.

Like all relief options, a settlement and debt consolidation are used to clear unsecured debt. This is the kind of debt that does not require you to sell any of your assets when you can't afford to pay it back anymore. It is a great way to reduce unsecured debt by using debt settlement. You basically make half of your debt disappear after some simple negotiations. They are simple if done by professionals, so it is best to hire a debt settlement company that will take care of this aspect and also of the future payments that you will make at lower interest or just save up the money in a settlement account. Whatever option you choose you should clear your debt in a period of 3 years without a big effort.

The thing about financial settlement is that it only works for unsecured loans of more than 10,000 dollars; so what do you do with lower loan levels? Easy, you use debt consolidation to make your monthly payments smaller due to increased interest rates and creditor fees. Debt consolidation is also very helpful when you make several payments each month to different creditors and have a problem with it. By suing this debt relief option you can unite all of your payments into a single and easy one each month. You send the money to the company which then divides it and sends it to the corresponding creditor, low interest of course. This option can be used for consumers with loans of over 2000 dollars.

It is not really a comparison between debt settlement and credit consolidation because each of them can be used to clear debt of different amounts. But for the general public, a settlement remains the better way to clear big amount of debt.

Source by Lisa Archer-Jones

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