Consolidation Vs. Settlement
Based on your answers, the best debt relief for you could be either debt consolidation or debt settlement.
Go with Debt Consolidation if . . .
- You are current on all credit card or unsecured debt payments.
- You feel confident that you will be able to pay off your full debt amount (the principle) within a few years.
- You are comfortable with closing your credit card accounts.
- You don’t want to ruin your good credit score.
If you sign up with a debt consolidation company, the company will roll all your unsecured debts into one monthly payment AND negotiate to lower your interest rates with the credit card companies.
Go with Debt Settlement if . . .
- You are currently behind or delinquent on at least one credit card account (although this is not required).
- You have so much debt that you don’t know if or when you’ll be able to pay it back.
- You’ve thought about declaring bankruptcy
- You don’t mind ruining your credit, or you already have poor credit.
Ifi you sign up with a debt settlement company, the company will negotiate with your creditors to settle your accounts for around 50% of what your actually owe. You will pay a lump sum to each creditor once a settlement has been reached. Settlement typically takes two to four years.