Whats the Difference Between Debt Settlement and Debt Consolidation?

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Whats the Difference Between Debt Settlement and Debt Consolidation?

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

In The News:

Business is booming for debt-consolidation companies as more ...
Bizjournals.com, NC - Nov 17, 2008
“Last month was the biggest month we ever had,” said Craven, president of Debt Settlement USA in Scottsdale. The national company, which operates in 29 ...

Working to Thaw Credit Markets: Social Lending Site LendingClub ...
MarketWatch - 3 hours ago
... as debt consolidation, home improvement, launching a new business venture, returning to school or for assistance with hundreds of other life events. ...

Athens Township: ATA Prez.: Debt consolidation could eliminate ...
Morning Times, PA - Nov 17, 2008
Debt consolidation has worked well for other municipalities facing similar situations, said Steiner. “That was one of the recommendations we got from our ...

Deleveraging Must Continue
Wall Street Journal - 16 hours ago
... it is of overwhelming importance to make a clear distinction between the deleveraging process within the financial sector and debt consolidation in the ...

Budgets help curb holiday spending
Belleville News Democrat, USA - Nov 19, 2008
Debt Consolidation Guides (www.debtguides .org/debtconsolidation .html) --Discusses types of debt, debt management and debt solutions. ...

Processes for consolidation, dissolution laid out for area school ...
McLeod County Chronicle, MN - 19 hours ago
But whether there is one or more consolidation partners, Hopeman said, a consolidation plan has to address some "key ingredients." • Address bonded debt. ...
3 districts still involved in McLeod West talks McLeod County Chronicle
all 2 news articles

Town debt to be deferred under a plan of Corzine's
The Star-Ledger - NJ.com, NJ - 11 hours ago
Corzine also will stress that towns should consider consolidation and sharing services to cut costs, according to a senior administration official familiar ...

Perry Ellis International Announces Results for Third Quarter ...
StreetInsider.com (subscription), MI - 3 hours ago
Its debt-to-capital ratio at 43% is equal to the debt-to-capital ratio for the same period last year. Excluding the $33.1 million related to the acquisition ...

Shop around for new insurance quotes
Philadelphia Daily News, PA - Nov 19, 2008
One recent participant used the debt-consolidation portion of a loan to pay off $1413 in credit card debt that had been carrying an 18 percent annual ...

Demand For Debt Consolidation Expected To Rise Despite Rate Cut
PR Web (press release), WA - Nov 9, 2008
Demand for unsecured loans for debt consolidation will continue to rise despite the Bank slashing the base rate to 3.0 per cent, it is predicted. ...

debt consolidation - Google News

Whats the Difference Between Debt Settlement and Debt Consolidation?

Debt Consolidation Debt Consolidation