The answer to this question depends on your amount of debt and your ability to make the monthly payments. If you are going through a financial hardship that makes it impossible to pay off your high level of debt, then debt settlement may be the right option for you. If you think you can afford to pay off all of your debt and make the monthly payments, consolidation could be better for you. It really all depends on the specifics of your financial situation and if you want to save money.
Debt settlement and debt consolidation are two forms of financial help for people struggling with more debt than they can repay. The two terms are often used interchangeably, which leads to a great deal of confusion on the part of consumers, who may not realize that these are vastly different debt relief services.
For example, let’s look at a debt settlement program, here you are negotiating with creditors to settle a debt for less than what is owed. This method is most often used to settle substantial debt with a single creditor but can be used to deal with multiple creditors VS a debt consolidation program where is an effort to combine debts from several creditors, then take out a single loan to pay them all. You are hoping for a reduced interest rate and a lower monthly payment. This is typically done by consumers trying to keep up with bills for multiple credit cards and other unsecured debt.
Now that you have this information you must weight your pros and cons, especially regarding the amount of time it will take to eliminate debts and the impact that it will have on your credit score. Both aim to make your debt more manageable. When used properly, either can help you get out of debt sooner and save money. The normal time frame for a debt settlement case is 2-3 years, which means 24-36 months of late fees and penalties added to the amount you owe while a debt consolidation takes anywhere from 2-5 years in a debt consolidation program before eliminating the debt.
We, Credit Services of America, personally prefer debt settlement because most clients facing these 2 options are generally up to the neck in debt with no breathing room financially. These clients are generally barely able to afford a little over the minimum payments to their accounts, meaning they are really only paying the interest and the principal balance really doesn’t move. Our goal for these clients is to alleviate the financial weight and help them be debt free by saving them as much money as possible (anywhere from 30-70% of their entire debt). We also prefer debt settlement over debt consolidation because many clients coming to us for help already consolidated once and now find themselves paying their consolidation loans and their credit cards are maxed out again.
Here at Credit Services of America we like to understand our clients and work together to help relief all the negative debt that is putting a stress to your financial life creating a plan to give you financial stability, financial freedom and finally putting the power back on your hands.
A Goal without a Plan is just a Wish. Give us a call TODAY at 844-FIX-URCR or click on the following link creditservicesofamerica.com to schedule your FREE consultation and create your personalize plan to achieve your credit and debt GOALS!
*Individual results may vary. Please call for details and to discuss your own individual situation.