Considering consolidation and need help!

Both debt management programs have their own ways of eliminating the debts off. While consolidation can be a better choice for those who have small debts, if you are unable to manage the minimum payments on a huge debt amount, settlement works. How much is the total you owe?

Look into the specifics of a debt consolidation and a debt settlement program. You will need to figure out the plan that sounds the best for you in the situation. Would you mind sharing about your debt accounts and the total figure so that people here can offer their guidance? Read some helpful tips on finding the perfect debt solution for you.

I have about $30000 of total debts from various credit cards. I would like to know which program is more appropriate for me.

Thanks, Max.

Max

debt settlement programs sounds better to me if I am in your shoes. A good counselor will be able to waive off the total by 40% to 60%. Consolidation program will also be good but the plan will take longer period to pay off everything. If you want to keep the program for short duration, the monthly payments will go higher.

In a settlement program, the monthly payment will be as per your present financial situation. You will send money to a separate trust account while the settlement company is negotiating with your credit companies for a "settled" amount

debt settlement does sound very attractive but I do have some concerns with the program. For one, do I stop all payments in the inital stage of the program? That mean that my interest rate on those account will rise and late fees will be added to the accounts. What if they are unwilling to settle with me, do I get stuck with those charges? Like I mention, I have talked to CreditSolutions and they claimed they wont be able to help me out on the debt I have with Citibank (a big chunk of my debt) because they can sue me afterward. I am also concern in what will have a lesser impact on my credit report.

You are right. Your account needs to be in "Default" state for a couple of months so that the settlement company starts their negotiation process. If you are allowed to keep your file current, the credit company will find that you don't have any problems in paying the debt. During this negotiation process, the higher interests rates and fees will be waived off to a final settlement amount.

Settlement programs stay in the credit report for seven years. What matters is that your accounts will be shown as paid. Some creditors will try to report the account as 'settled', your settlement company can negotiate with the credit companies for a better rating. Ask your company whether they have any success in working with any of your credit companies. You will get a direction.

How about debt consolidation? What is it con?

Thanks, Max.

debt consolidation will stay in the credit report for as long as you are enrolled in the plan. It offers better results to those who can continue making the consolidation payments. Basically, this one is for those who have shorter amount of debts and have their file in current state. This program doesn't hurt the credit ratings severely.