Debt Consolidation

If you happen to be an individual who is experiencing stressful nights and losing sleep due to your credit card debt, then logically you are contemplating all of your avenues on how to resolve this predicament. You may have talked to a few different companies or spent tireless hours researching the web to decide whether to go the avenue of credit card debt consolidation or credit card debt settlement.

What it truly comes down to is the debt situation that you are currently experiencing. If you don’t have a extremely large amount of debt and aren’t having an extremely difficult time paying it off then credit card debt consolidation could be a more suited fit for you. What the credit card debt consolidation establishment will do is reduce the APR on your accounts, and institute a manageable payment program in which the company will spread out the payments to the creditors for you. At the end of the road you will be debt free, however the process usually takes around 5 years and you do have to pay back the entire amount plus interest. But you will in the end be free from the handcuffs of debt.

Now will credit card debt consolidation be the right avenue for all, absolutely not. You won’t in reality see too much of a reduction in the amount that you must put out each month. So for people who are having issues keeping up or have fallen past due, debt settlement may be a better avenue to take. The most viable candidate for debt settlement is someone who is around $15,000 in the whole or more and are experiencing real hardship keeping up with the minimums. Seeing that in debt settlement you’ll have a reduced payment you pay out each month because you won’t be paying back the debt in its’ entirety.



Basically the dissimilarity comes down to this, going with credit card debt consolidation you pay back around 120% of what you owe, which is a far cry away from the amount you would be obligated to pay through the minimum payment structure. However it’s also a large difference from the amount you’ll pay back with debt settlement. With going through credit card debt consolidation it will also take you close to 5 years to be free of debt. Debt settlement will look to save around 40-50% of what your current balance is and be out of debt in 2 years or less, depending on how fast you can raise the money necessary to negotiate the settlement.

Steve Bis is a debt analyst and research assistant with the US Consumer Advocate, which primarily practices in credit card debt relief.

- steve bis

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