Different Methods to Get Rid Of Credit Card Debt - Credit Counseling or Debt Settlement
People normally turn their attention to either credit counseling or debt settlement when they are trying to get control of credit card bills that have gone out of control. These methods are both excellent ways to keep your credit score good. You are also able to live up to your contract agreements with your creditors to some degree.
These separate options are both very different. You need to know the differences between these two types of credit settlement so that you can entirely get rid of your credit card debt with as least difficulty as possible if you are in a situation where you need to get a debt settlement.
Credit Counseling - Actually, credit counseling is not any form of counseling at all. The "counseling" is actually done by
Companies that are non-profit and have arrangements already made with most of the major credit card companies. The pre-made arrangements are fairly easy. The creditor can write off types of concession that you are gives as "donations" for the most part, since they are considered non-profit. The agency will combine all of your added up debt, and then negotiate a settlement with your creditors individually. The creditors you are with will normally try and give you heavier interest rate concessions. You send the payments that you have settled for to the credit counseling people, which in turn send it out to the credit card companies you owe money to. You are usually able to save a lot of money by making a settlement and can pay off your debts much quicker.
Debt Settlement - Pretty much this type of settlement is exactly what it says. In order to settle your debt with the credit card companies you send them a sum of money. With one creditor let us say you owe $5,000 dollars to. Thinking realistically, you could get rid of this debt for %50 or %60 of the actual value. Normally they will not accept any kind of payment arrangement, which is the downfall of debt settlement. Usually within two weeks your offer will be accepted and the amount will be due in full.
It is always recommended to have someone working for you in this with either option that you choose. You can locate a third party organization that will match people with the proper credit counseling or debt settlement firms. Within a few simple questions the third party is able to tell you which option that you would be better off choosing. You are then given the phone number and name of the organization that you are recommended to work with.
The company doing the referring here usually has good relationships and understanding of various organizations they work with, so they will not lead you to a company that could potentially scam you.
If you are trying to be responsible you should contact the third party organization to recommend either a credit card counseling or debt settlement, if you are truly considering a debt settlement. For you to better understand the situation and processes involved in this matter, the organizations will offer free advice and point you in the correct direction.
These separate options are both very different. You need to know the differences between these two types of credit settlement so that you can entirely get rid of your credit card debt with as least difficulty as possible if you are in a situation where you need to get a debt settlement.
Credit Counseling - Actually, credit counseling is not any form of counseling at all. The "counseling" is actually done by
Companies that are non-profit and have arrangements already made with most of the major credit card companies. The pre-made arrangements are fairly easy. The creditor can write off types of concession that you are gives as "donations" for the most part, since they are considered non-profit. The agency will combine all of your added up debt, and then negotiate a settlement with your creditors individually. The creditors you are with will normally try and give you heavier interest rate concessions. You send the payments that you have settled for to the credit counseling people, which in turn send it out to the credit card companies you owe money to. You are usually able to save a lot of money by making a settlement and can pay off your debts much quicker.
Debt Settlement - Pretty much this type of settlement is exactly what it says. In order to settle your debt with the credit card companies you send them a sum of money. With one creditor let us say you owe $5,000 dollars to. Thinking realistically, you could get rid of this debt for %50 or %60 of the actual value. Normally they will not accept any kind of payment arrangement, which is the downfall of debt settlement. Usually within two weeks your offer will be accepted and the amount will be due in full.
It is always recommended to have someone working for you in this with either option that you choose. You can locate a third party organization that will match people with the proper credit counseling or debt settlement firms. Within a few simple questions the third party is able to tell you which option that you would be better off choosing. You are then given the phone number and name of the organization that you are recommended to work with.
The company doing the referring here usually has good relationships and understanding of various organizations they work with, so they will not lead you to a company that could potentially scam you.
If you are trying to be responsible you should contact the third party organization to recommend either a credit card counseling or debt settlement, if you are truly considering a debt settlement. For you to better understand the situation and processes involved in this matter, the organizations will offer free advice and point you in the correct direction.