Debt settlement can be more effective on credit card bills than debt consolidation. Your total cash outlay is less so it can keep you from a bankruptcy. Bill consolidation programs will not deal with a collection agency so if this is your situation. In addition, consumer credit counseling is not a form of debt negotiation and need to know that these programs will not help you with a judgment, but will help you get out of debt.
Many people are confused by the range of programs which proclaim that you can get out of debt:
- debt settlement
- debt negotiation
- consumer credit counseling
- bill consolidation
Debt settlement is a program in which you companies will negotiate with the credit card company for you and keep a percentage of the savings as a fee. They do not deal with a judgment. If you need to get out of debt securely and safely, do it yourself – don’t let some debt consolidation agency take your financial fate in their hands, and DO NOT DECLARE BANKRUPTCY!
Debt negotiation is a program in which you make payments to the debt negotiation company over a period of time. They tell you to stop making payments to your credit card companies until they go to collection agency companies. At this point they negotiate with the collection agency to settle your debts for 10% or less on the dollar. They keep a portion of your payments as a fee. They do not deal with a judgment. This may not help you get out of debt in the long run, though!
Consumer credit counseling agencies collect no fees from the consumer, but receive a kickback from the credit card companies, and this is how they make their money. They set up one monthly payment, negotiate reduced interest and fees, and pay the credit card companies for you.
Bill consolidation is generally thought of as where a person gets a loan to pay off all of their bills and then he or she has only one payment. These loans handle all kinds of debt. Help yourself get out of debt with sound debt consolidation and eliminate the need for declaring bankruptcy.
You need to be careful when selecting debt consolidation programs like debt settlement, debt negotiation, consumer credit counseling and bill consolidation. Not all programs deal with a judgment and collection agency - so not all of them can get you out of debt. They can keep you out of bankruptcy, though.
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