| Deciding Between Debt Management And Debt Settlement |
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| Written by Jackson Roberts |
| Tuesday, 13 July 2010 19:59 |
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Given the large amounts of unsecured debt that they are carrying, many consumers find themselves in a position where they need to make a choice among the many debt solutions available. For those with serious debt problems, the most likely choices are bankruptcy, debt settlement or debt management.
Given the large amounts of unsecured debt that they are carrying, many consumers find themselves in a position where they need to make a choice among the many debt solutions available. For those with serious debt problems, the most likely choices are bankruptcy, debt settlement or debt management. Bankruptcy should be the solution only when none of the others appear likely to extricate the consumer from his overwhelming debt, as its consequences to a credit report are so severe and long- lasting. The solutions that need to be examined very closely are debt settlement and debt management, as each will have its advantages in some cases relative to the other. In general, debt settlement is designed for debt problems that fall just short of bankruptcy. Debt management on the other hand is a more conservative choice for those whose finances are nearly manageable. Only modest intervention is required to move forward with paying down their debt. So what specifics can a consumer look to in order to decide which solution is preferable for them? Here are some of the earmarks of situations that should be handled with debt management: * The debt is not too overwhelming and is manageable, but it is still piling up * All the different payments and due dates are becoming difficult to organize and handle each month * Some moderate assistance with your interest rates would be a great benefit Debt settlement, in contrast, may be best suited for scenarios such as these: * Only the minimum payments are being made monthly on accounts with high interest rates * The total monthly payments toward unsecured debt are simply too large; significantly lower payments are an absolute necessity to make any headway One significant factor to keep in mind when deciding among the debt solutions is the impact each has on your credit. How much of an impact and for how long? Bankruptcy will severely damage your credit score and the damage can remain for 7 to 10 years, or longer. Similarly, debt settlement will do some damage to your credit, but it will last for a much shorter duration. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Jackson Roberts is a debt analyst and an expert in the field of credit card debt relief. He has helped numerous indebted consumers become debt free through consumer credit counseling services. |