Home level Articles level Debt Consolidation and Settlement level

41 Ways to compare and contrast major debt relief options

# Questions Interest Rate Arbitration Debt Management Debt Settlement Bankruptcy
1. Will you get free budget counseling?    
2. Does principal amount get reduced?      
3. Does interest rates get reduced?    
4. Does it affect credit score negatively?     ?

Your credit score can drop by about 120 points.

 ?

Your credit score drops by about 200-250 points.
5. Does it help increase your credit score? ?

It helps you improve your credit score as all your debts are paid off through a low interest secured loan.

 ?

When you pay off your debts in full, the status of the accounts get updated as "Paid in Full", which may boost your credit score.

    
6. Will it help getting rid of creditor/collection calls? ?

Creditors/collectors won't call you after you submit bankruptcy petition.
7. Does it help repay unsecured debts?
8. Does it help repay secured debts?      
9. Can you discharge unsecured debts?
10. Can you discharge secured debts?      
11. Does it help repay tax debt?      
12. Are creditors bound to accept it?  ?

Here, you're paying off all your debts with a new secured loan. This is why there is no question of creditor acceptance or rejection. All the existing creditors would love to get back their money.

 ?

Creditors may refuse to work with debt consultants. They have full right to do so.

  ?

Creditors/collection agencies can refuse to work with the debt settlement company.
13. Does it kill your debts?      
14. Do you have to pay any professional fee?  ?

May have to pay a closing cost to obtain a secured loan.
15. Do you need to pay upfront fee?  ?

You are only required to pay the interest on the new loan.

  ?

Under the new FTC rule, the debt relief companies can't charge upfront fees before providing any service.

 ?

As per the new FTC rule, the settlement companies can't charge an upfront fee. They can charge professional fee after settling at least one account successfully.

  
16. Can creditor come after you for remaining balance?  N/A  N/A  
17. Do you need to pay any tax?     ?

The total amount saved through debt settlement process is considered by IRS as taxable income of the debtor.

  
18. Can you preserve your privacy?  
19. Will it help you obtain new loans in future? ?

If your credit behavior is good after erasing your debts through this option, then you can secure new loans in future.

 ?

Creditors/lenders will lend you money after finding out that you have paid off your debts in full.

 ?

You can obtain a loan in future provided you maintain healthy credit.

 ?

You may have to wait for 2-3 years for securing a new loan.
20. Do you become debt free within few days?        
21. Can you still be sued?  
22. Can you incur debt again?
23. Do you need a collateral?      
24. Can you repay debts with single monthly payments?  
25. Can late fees get waived off?
26. Do you have to pay a penalty?        
27. Is there any chance of wage garnishment?        
28. Does it wipe out community debts?      
29. Does it remove lien?      
30. Does it stop foreclosure?      
31. Do you need to save money in a trust account?  N/A  N/A  N/A
32. Do you need to appoint a lawyer?      
33. Do you need to sign any agreement?
34. Does it provide legal protection?      
35. Can creditors contact you?  N/A ?

Usually, the debt consultants deal with your creditors on your behalf. But they can still contact you.

 ?

Creditors may contact you regarding payments and other issues.

  
36. Can you do it yourself?  
37. Should you continue using your plastic cards?        
38. Is it a legal solution?
39. Does it help you repay your payday loans?
40. Does it help repay student loan?  ?

You may repay your debt through a consolidation loan.

  ?

Federal student loans can't be paid off through debt settlement. You can try out other options such as deferment, IBR, forbearance, etc.

  ?

You can't include student loans in bankruptcy.
41. Does it help you pay off your medical bills?      


About Us | Contact Us | Privacy Policy | Affiliate | Sitemap | Espanol | RSS Feeds| Terms of Services
* Disclosures:
  • By signing up for counseling session, your provided details (Name, Email ID and Phone No.) will be forwarded to the company advertising on the DebtCC. However, you have no obligation to use their services.
  • Some creditors and collection agencies refuse to lower the pay off amount, interest rate, and fees owed by the consumer.
  • Creditors/collection agencies can make collection calls and file lawsuits against the consumers represented by the debt relief companies.
  • Debt relief services may have a negative impact on the consumer's creditworthiness and his overall debt amount may increase due to the accumulation of extra fees.
  • The amount which the consumer saves with the use of debt relief services can be regarded as taxable income.
Page loaded in 0.093 seconds.