Debt Settlement Or Debt Consolidation - What's the Best Debt Relief Option?

May 28, 2010 - PRLog -- How do you decide whether debt settlement or debt consolidation is the right option for you? What parameters need to be taken into consideration? When it comes to debt settlement or debt consolidation, you need to know that they produce different kinds of outputs. Debt consolidation does not produce the same results as debt settlement. One can also say that it does not carry the same level of popularity. Loan takers in the United States are interested in getting their liabilities eliminated. They are not concerned whether each liability is dealt in an individual manner or all the liabilities are combined.

If you have more than one liability, you need debt consolidation

Will you select settlement or consolidation as your relief option? Instead of using a blind approach and making a random decision, you need to know what each solution is used for. Debt consolidation is the combination of different secured and unsecured liabilities that a person has. In other words, you need to have more than one liability. If you don't then you don't need this option.

Some loan takers are confused. They don't know whether to go for a settlement or consolidation because they are unaware of the differences between the two. In addition to that debt consolidation is not as attractive as debt settlement. You cannot expect an elimination of seventy or eighty percent. The bank adds all your payables and then reduces a particular percentage. This is called the discount rate.

Don't go for debt consolidation if you have only one thing to worry about

Single liability holders do not need to be worry about debt settlement or debt consolidation. They can simply look for a good relief organization. You can find a good one thorough debt relief networks. Once you are done with that, submit all your financial details including your transaction snapshot. After that, the following steps are followed by the debt settlement company

· Your consultant will contact your credit card company
· He will submit your financial details and apply for settlement
· If the bank accepts the request, your consultant will be given the dates of negotiation

In the negotiation process, your consultant will be discussing all the points with the legal attorneys of the credit card company. During this discussion, both the sides reach a conclusion about the reduction percentage. This percentage suits both loan taker and the money granting company.

Getting out of debt through a debt settlement process is currently very popular but you need to know where to locate the best performing programs in order to get the best deals. To compare debt settlement companies it would be wise to visit a free debt relief network which will locate the best performing companies in your area for free.

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