When you can't keep up with your monthly bill payments, you may choose either debt consolidation or settlement depending upon your financial situation. To decide upon debt consolidation vs debt settlement, you should go for a free counseling with a debt relief company which will help you analyze which option will work better for you.
Here's a brief idea on debt consolidation vs debt settlement.
This is an option where you take help of a debt relief company in order to negotiate with your creditors or a collection agency so that they reduce the interest rates at which you pay your bills. In addition, negotiation can help to reduce or eliminate late payment fees or interest charges you've incurred on your accounts. When rates are reduced, it becomes easier for you to manage your monthly payments. Moreover, you get the chance to consolidate multiple bills (credit cards, payday loans, medical bills etc) into a single monthly payment that's much easier to manage. For further information on how a debt consolidation program works, you may refer to the article on this topic.
It's a viable option when you're not in a position to make reduced monthly payments in order to clear your debt. That is, you need to have your outstanding bills reduced in order to get rid of debt faster. This can be done by way of debt settlement wherein a debt relief company can get your creditors to reduce your debt by a certain amount. So, once you repay your outstanding dues, you're legally out of debt.
How to decide upon debt consolidation vs debt settlement
The most important factor that helps you decide upon debt consolidation vs debt settlement is whether you're capable of managing monthly bill payments at reduced rates. If this isn't possible, then you need to negotiate accordingly in order to settle your debt for less than what you owe.
Finally, you can glance through our 31 Ways to compare and evaluate debt consolidation and settlement page to determine which debt relief option will suit you best. You can clear all your doubts regarding debt consolidation and settlement and take the right decision.