Whats the Difference Between Debt Settlement and Debt Consolidation?


The Debt Settlement process involves negotiating with your creditors to settle your debt for amounts significantly less than you currently owe; typically debt settlement can settle your debts for 40-60% of your current balances. This will save you sizable amounts of money on debt principal and interest. It also provides you with the opportunity to pay-off your debts faster.

Debt Consolidation can be accomplished two ways. The first method is through a debt consolidation loan, and second through a debt consolidation service. A debt consolidation loan provides funds to consolidate all of your debts into one single monthly payment and is traditionally secured in the form of home equity. A debt consolidation loan reduces the number of payments you have going out monthly and can simplify your debt problem. However, a debt consolidation loan does not mean you are debt-free; the debts have just been transferred to a new creditor.

Hopefully, this debt consolidation loan will provide you with a lowered APR and allow you to pay off the new loan quicker. This may sound like a good solution to avoid bankruptcy and get out of debt; however, it can also damage your credit and cause you to pay back far more than if you had selected a debt settlement or debt arbitration program.

Debt consolidation services claim to provide assistance and guidance for people with debt and credit problems. They claim that they will work with your creditors to provide you lower interest rates and payments. However, these debt consolidation services spend millions of dollars each and every year on advertising and exist for one purpose only; to ensure that the credit card issuers get paid back every cent that is owed. They call themselves non-profit debt consolidation companies but, this can be misleading. The bottom line is that these "non-profit" debt consolidation companies are funded by the credit card companies that they are supposedly "negotiating" with to help you

Alan Barnes
IAPDA Certified Debt Arbitrator
President and CEO of Debt Regret
http://www.debtregret.com

More Resources

Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exiting

More Debt Consolidation Information:

Related Articles


Cutting Your Monthly Outgoing With Debt Consolidation
With consumer debt on the rise, many people have found themselves burdened with crippling monthly repayments on a variety of loans. This can make life very difficult, and can often means seriously compromising on your quality of life.
When Your Bills Are Piling Up Here Are 6 Different Ways to Consolidate
When it comes to debt consolidation some people dream of day when all their bills will disappear. Next to hitting the jackpot, a debt consolidation loan is some times the only way out for a debtor.
What Your Mama Never Told You About Debt Consolidation Services
When someone is extremely deep in debt, and he or she has no other options to prevent bankruptcy, debt consolidation can be his or her savior. Debt consolidation can also be a very wise choice for someone who has many debts on high interest credit cards.
Debt consolidation - More Options for Reducing Credit Card Costs
Borrowing money against your credit cards has always been among the most expensive ways to borrow money, and when you fail to pay your bill in full each month, borrowing is exactly what you're doing. You're not alone; the average American household now carries more than $8000 in credit card debt.
The Pros and Cons of Debt Consolidation Loans
You are swimming in debt. You have 4 credit cards maxed out, a car loan, a consumer loan, and a house payment.
Student Loan Consolidation
Student loan consolidation is one of the most used methods for reducing and working off student debt. If you want to consolidate debt, whether it's a student loan debt or not, you have to follow a certain process.
Debt Consolidation Benefits
If you've ever been in a situation where you needed money that you didn't have, you probably already know about loans and credit cards. Here is a brief Explanation on What both are:LoansA loan is a type of financial aid which must be repaid, normally with interest.
What is Debt Consolidation?
Here is a useful guide to what is Debt consolidation. For some people with credit problems debt consolidation may be an answer.
Vultures and Victims
Has anyone noticed how many loan companies now fill up the commercial breaks? Sofa, after of sofa of happy couples are shown, with carefully manipulated stereotypes discussing the consolidation of their finances, recommending a particular provider. Couples, who have had loan requests knocked back from the standard, high street or traditional credit lenders, find themselves turning to alternative finance providers in the hope that they can move their debt situations forward.
What Is A Debt Consolidation Program?
Debt consolidation programs are devised to get you out of debt in the quickest and most inexpensive manner possible. When you sign up with a debt consolidation manager they will work with your creditors to combine all your debt and lower your monthly payments.
Is A Debt Consolidation Loan Your Best Option?
For many people the lure of easy credit has taken them into the forbidden zone of debt. Between debt on regular credit cards, shopping store credit cards, home equity lines of credit, mortgages and car payments it's no wonder consumers are finding themselves financially and emotionally drained as they float in a sea of debt.
Burdened with Debt?
Too many debts? Having trouble paying your bills? Are you worried about losing your home or your car?You're not alone. Many people face a financial crisis some time in their lives.
No-Cost Student Loan Consolidation
No-Cost Student Loan ConsolidationA no-cost student loan consolidation - doesn't that just sound too good to be true? Think about it. You have just accrued thousands of dollars in debt through student loans after 4 years of college, or possibly even more.
Free Yourself Of Debt and Worry with Debt Consolidation
Debt consolidation programs can help you lift the burden of excessive debt and potentially save you hundreds of dollars a month. Debt consolidation professionals will work with you and your creditors to design a plan to help you lower your payments and reduce your debts quickly.
Escape the Credit Card Death Spiral
You're burdened with crushing debt and at the end of your rope. There's got to be a way out.
Pay Off Debt - Get Out Of Debt And Lower Your Monthly Payments
Debt consolidation can be confusing, especially if you have never considered contacting a debt consolidation company before. A debt consolidation company can give you free advice on reducing your monthly payments and show you the path to becoming debt free.
Debt Consolidation: Its all in the Planning
If you're like thousands of other people who find themselves deeply buried in debt, facing a daily barrage of creditors and bills, and wondering how on earth they are ever going to dig themselves out of this hole, a debt consolidation re-mortgage could be your best bet.By consolidating all of your bills into a single, easy to make, monthly payment you are able to get a handle on your debt before it gets any more out of control than it already is.
Debt Consolidation Primer - Four Things You Can Do to Get Out of Debt
Problem debt is rampant throughout America. In addition to mortgages and auto loans, the average household in the U.
Is There Something Called a Bad Credit Credit Card?
Is there something out there called a bad credit credit card? Well, when a bank or Credit company such as Bank of America, Washington Mutual or Chase receive an application from you, they use a statistical system to determine whether or not to grant credit to you by assigning numerical scores to various characteristics related to creditworthiness. This means the creditor's measure of your past and future ability and willingness to repay your debts.
Credit Counseling - Six Tips to Avoid Counseling Scams
Credit counseling is a useful service for anyone with problem debt. A good counseling agency can provide advice regarding money management and debt consolidation.