How To Make the Choice
When you have a lot of debt it can be tough to know which way to
go or even who to go with when dealing with it. But you have
some real choices as to how to handle it with the big two being
debt consolidation and settlement. Each one involves helping you
with your debt, but a debt consolidation and a settlement are
very different in how they do it – even though in those
differences there are similarities depending on how it is
handled
The long and short of it is that one involves paying everything
down and the other involves only paying back some of it. If you
choose to get a debt consolidation you will pay back everything
you owe and with a settlement you will not. A debt consolidation
will put everything that you owe into a payment plan that you
pay down over one to three years; while a settlement could
involve a payment plan, or it might not – it depends on you and
your finances.
Quite often people get a settlement thinking that they are
simply going to write their debt off and they will be debt free
without having to have gone through a bankruptcy. However, it
still goes on your credit as settled – so even though it is not
as bad as a bankruptcy, it is still bad news and bad for your
credit. If your creditors agree to an amount that you can pay
off in one fell swoop that is great – but if they don’t you will
end up with a payment plan that you will pay off over a certain
period of time. The interest rate will be determined by the
company that you go through. A debt consolidation will not hurt
your credit if done right – and you will be left with less debt
over time because you are paying down the debt that you have
taken on at a lower interest rate which will save you money.
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