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 Posted: Tue Mar 06, 2007 2:43 pm Subject: Debt settlement, debt consolidation and debt counseling dif! |
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Hi community,
Sorry for the stupid question, but could someone clarify to me one thing.
debt settlement vs. debt consolidation
I understand precisely how debt settlement/negotiation works. (3rd party or me negotiate debt to lump sum cash settlement
I understand how credit counseling work (lower interest, one monthly payment to 3rd party, they pay all creditors. pay debt + lower interest or and fees)
Now my question:
according to the http://www.debtconsolidationcare.com/debt-solution.html
debt consolidation can reduce the payment by 30-70% - so how is it any different from negotiation/settlement?
Is there any difference?
Please I'm confused..
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adobrand
Joined: 29 Sep 2006
Posts: 21
Debtcc Points: 886
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| Posted: Tue Mar 06, 2007 2:45 pm Subject: |
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My understanding was that debt consolidation reduces your debt by lowering interest rates and eliminating fees.
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goudah2424
Moderator
Joined: 31 Oct 2006
Posts: 8007
Debtcc Points: 111639
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| Posted: Tue Mar 06, 2007 2:51 pm Subject: |
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yes. Mine too.. So will it result in 30-70% decrease in total debt? (how long you have to be deliquent to accumulate so much interes/fees..)
In my case I'm still current, but will be deliquent next month... Will the consolidation will help me than?
In this case what's the difference between credit counseling and consolidation?
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adobrand
Joined: 29 Sep 2006
Posts: 21
Debtcc Points: 886
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| Posted: Tue Mar 06, 2007 2:56 pm Subject: |
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The basic difference is that you pay the principal amount in the consolidation program whereas in debt settlement plan, the total balance is negotiated for a lower amount. The principal amount is also included in the part of the negotiation.
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mcranberra
Joined: 14 Aug 2006
Posts: 527
Debtcc Points: 7151
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| Posted: Tue Mar 06, 2007 4:18 pm Subject: 3 types of consolidation |
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there are 3 types debt consolidation .
1) debt settlement/negotiation
2)credit counseling
3)consolidation loan
The types of programs that advertise 30-70 % is debt settlement.
You mentioned that you are about to go behind. How much unsecured debt do you have and with what companies?
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dave2468
Guest
Debtcc Points: 100
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| Posted: Tue Mar 06, 2007 7:53 pm Subject: |
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Thanks all!!
Now it makes sense to me, when people with debt consolidation - debt settlement interchangebly
I have almost 39k in unsecure debt with american express (5k), band of america (10k), chase (5k + 5k - 2 cards), citi (5k + 2.5k - 2 cards, discover 6k)
I am shopping for the debt consolidation program now.
I don't want to ruin my credit score a lot, I start a job in public accounting, right from the college, so I guess debt settlement will not look very nice on my record if the employer will want to check it.
I start in september. The summer job on the beach will carry me for couple summner month. But right now I don't have funds to pay around 900 in minumum payments..
So what do you suggest?
I really want to get rid of my debt as soon as possible. I even consider settlement - I'm not sure how it will effect my career in Public accountin...Will CPA look bad with settled accounts?
(my starting salary will barely cover minimum payment + rent and utilities).... This along makes me want to consider settlement...
I so hard to think straight when you in debt this much.
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adobrand
Joined: 29 Sep 2006
Posts: 21
Debtcc Points: 886
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