Is Debt
Settlement Superior To Debt Consolidation?
It has always been a matter of competition for both the debt
consolidators and debt settlement companies to prove themselves over each
other. But somehow debt settlement has managed to stay ahead in this race of
oligopolies.
What are debt consolidation programs?
Debt
consolidation programs give you a loan to help you manage your way out of debt
by allowing you to pay off your earlier creditors.
You are charged
interest on it and at times even to your earlier creditors. Your principle
amount remains the same, but you are still kept far away from clearing your
debt.
In short, you don’t get to experience a debt-free life for
a significant amount of time; and by the time you do, you no longer have a
life.
This is why most people choose debt settlement over debt
consolidation.
What is debt settlement?
Debt settlement, on
the other hand, is your rescue ship if you are drifting toward bankruptcy. If
you are already in bad standing with your creditors and your credit rating is
low due to a lack of payment history, then joining a consumer debt relief group
can be the best way to modify your debt to income ratio and stabilize your
account ratings.
Looking at this new status of yours, where you have
cleared your past debts with the help of debt settlement program, your future
creditors will hold you in consideration.
And this definitely saves
you from facing bankruptcy, which really should be your last option if you are
in debt, as it is so damaging to your credit score.
The bankruptcy
tag accompanies you for a very long time--almost seven to ten years after your
filing for it. This takes away your financial freedom and books you as
unreliable in the eyes of creditors. And this is precisely why debt settlement
will provide you with a better solution
than debt consolidation.
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