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DEBT SETTLEMENT: The Benefits |
The benefits of debt settlement services can best be illustrated by comparing debt settlement, frequently called credit card debt negotiation settlement, to the other debt reduction solutions that are available. Debt settlement and its components will be contrasted here as it relates to the alternatives of bankruptcy, consumer credit counseling, and debt consolidation loans.
Debt Settlement Vs Bankruptcy: For those people who have been under extreme financial pressure, filing bankruptcy can often seem like the solution with most merit. It certainly gives the illusion of “wiping your financial slate clean” and providing a fresh start for your future. However, filing bankruptcy does have consequences that do not immediately come to mind when you are under prolonged financial stress. A bankruptcy filing remains on your credit history for up to 10 years and can impact qualifying for future home and vehicle loans at reasonable rates of interest. It can also be a hurdle to obtaining future employment opportunities if employers screen credit history as part of their hiring process.
Debt Settlement Vs Consumer Credit Counseling: While debt settlement services are relatively new to the realm of debt resolution options, consumer credit counseling services are in fact, much more well-known as a way of resolving credit card and other unsecured debt problems. However, consumer credit counseling plans are designed to insure a full payback of the debt owed, and any additional interest charges that accrue. Debt settlement services are designed to reduce the actual debt owed to a lesser, or “negotiated amount”. Therefore, the amount of time required to complete a debt settlement program is typically several years less than a traditional consumer credit counseling plan. For those who have grown weary from being under the stress created by chronic debt problems, a debt program requiring a longer amount of time to complete seems less attractive as a solution.
Debt Settlement Vs Debt Consolidation Loans: Debt consolidation loans are also another well-known debt resolution option. However, there is a risk involved as collateral is almost always required to secure a favorable rate of interest on a consolidation loan. That collateral is most often a home, and the unsecured debts are essentially converted into secured debt through this loan process. Should unforeseen circumstances create serious financial hardship in the future, and you have difficulty making these monthly payments, you could lose your home. Always proceed with care when considering a debt consolidation loan solution.
For general questions about debt settlement services or the estimated amount of time it would take you to complete your own customized debt negotiation settlement program, simply fill out our brief online form. A debt settlement specialist will contact you promptly for your free consultation.
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