The Path to Debt Relief - Debt Settlement Vs Credit Counseling

July 30, 2010 - PRLog -- Debt settlement and credit counseling are one of the two options that you can avail when trying to pay off your debts to creditors. There are pros and cons of both these methods and you can choose either.

In counseling programs, the negotiators ask your creditors for a reduced rate of interest but still you pay close to the minimum amount due.

In settlement programs, the negotiators reduce your actual balance and not the rate of interest, thus allowing you to save money.

The difference between debt settlement and credit counseling is much. The amount you save is much more with settlement programs than with counseling. In counseling you pay around 120% to 125% of your balance. This is because although your interest is reduced, it is not done away with. If you opt for debt settlement, you save up to 40 to 60 percent because your actual balance is reduced.

Another difference is that, you pay your dues much faster with settlement than if you opt for credit counseling. It takes about two to three years with settlements and about 5 years or more with counseling.

The other difference is that if you opt for settlement, your account must go into default whereas with counseling programs your account will still show as current.

Now, if you are wondering what to do, it really comes down to your particular debt status. If your repayments are huge, then you should opt for settlement. However, if your owed amount is not much and you can still afford to keep your account current, credit counseling is the way to go.

If you opt for counseling, make sure that you have a steady income flow because if you miss even one program, you can be kicked out of the program. If you opt for debt settlement, there is always the possibility of being sued.

But it is up to you. If you choose to clear within a short time, opt for debt settlement and if you want to go on paying but through one medium and not in separate amounts, you can opt for credit counseling.

Debt settlement is a legitimate alternative to filing bankruptcy. Consumers must be experiencing a legitimate financial hardship and have at least $10k in unsecured debt to qualify for most programs. Check out the link below to locate legitimate debt settlement companies in your area for a free consultation.

Free Debt Advice
(http://www.defeatdebts.com)

Contact us for free debt advice = 8883613619