Consumer credit counseling programs vs Debt negotiation plans which is more suited for you?
Were all aware that we here in the USA are stuck in the midst of a terrible economic recession. Without having to mention this is causing serious loss to many Americans. There are an almost a never ending number of foreclosures plus rising levels of unemployment. To add insult to injury credit card debt is on the rise. This is leaving millions of people in predicaments with their debt that is very compromising. At some point people start thinkning about reaching out and getting some help with their debt situations when they come to the realization that there are not too many options on the market to help them. The two most used of debt reduction plans are credit card counseling programs sometimes referred to as a credit card debt consolidation program and debt settlement sometimes referred to as credit card debt negotiation.
The two of these plans do have the ability to help people get out of debt much faster than if they were to just hang out on the debt treadmill and continue to make monthly minimum payments. However these programs are very different.
A consumer credit counseling plan has very lucrative benefits; one being they can normally get the interest rates decreased. Another extremely nice aspect of the program is that you will make merely one payment a month to the credit counseling company in which they disperse to your creditors for you; thus making your life much more simple with paying your bills. On average a credit counseling program can last anywhere from 5-8 years to realize debt freedom.
Debt settlement is a much different sort of a process. For one you actually lower your debt not your interest rate. So you end up saving a lot of money, in most cases the debtor will see a savings of 50% or more of what they owe. Another large difference from a consumer credit counseling program is that you will become debt free much quicker with debt settlement, on average no more than four years. However there is one downfall, in order for the credit card companies to be willing to work out a debt settlement the credit card accounts must go into a delinquent state; the creditors will never negotiate when you’re current. So this does have a adverse effect on the credit report.
The negatives put to the credit score will not remain there forever and it will rebound towards the conclusion of the credit card debt settlement program. But for most Americans in credit card debt one of the two plans reviewd above will be of assistance. Those people who have no problem paying their minimum payments right now should go for credit counseling; but those who have a lot of credit card debt and have a tough time maintaining there payments then credit card debt settlement would be a better option.
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