Debt Consolidation vs. Debt management Programs and loans
Date: Mon, 08/07/2006 - 06:21
I am in the process of getting my home ready to go on the market. I expect it to go on the market in late September to mid October.
When the house sales, I will be looking for land to build another house (I built this one too).
I am looking to tie all my bills, with the exception of 2 credit cards, into some sort of payment program where I can have everything due at one time - one bill.
After reading through several postings here on this forum, I am coming to a conclusion that the debt consolidation offered sounds almost like a settlement..where the counselor "bargains" with the creditor and determines that I owe this much, but I will pay you this much.
In the past, I have heard that this type of action could wreek havoc on a credit report.
I went through a debt management (then called consolidation as well)through Harbour Financial Services a few years ago. It did not even show up on my credit report....but I didn't really see any positive results from the service either. I paid it off by rolling it into my construction loan.
How would a bank, say 6 months from now, look at a consolidation program vs. a management program in terms of granting a construction or perm loan?
As of yesterday, I destroyed all but two of my credit cards...and it felt good.
Any and all help would be very helpful. As mentioned, I plan on joining the site a little later today.
There is a difference between a consolidation program and a sett
There is a difference between a consolidation program and a settlement program. When you choose a consolidation plan, the counselor negotiates with the credit companies to reduce the interest rates and the late payment fees and any other financial charges. Thus, you are asked to pay a reduced amount after the consultant has fixed your plan.
In a settlement program, the settlement company first asks you to be in default for 4 months before you get started with their program. You choose this program when you are unable to make the minimum payments of your creditors. This can also be an option when you find hard making the consolidation payments.
Both of these programs have their own approach. But they aim to pay off your debts with the creditors. Some lender viewing your credit in the future will appreciate your paying off the debt accounts. Consolidation is given more points than the settlement program but it entirely depends upon the financial situation you find yourself in. One quick look at how each of these programs work.
http://www.debtconsolidationcare.com/debt-settlement.html
http://www.debtconsolidationcare.com/benefits.html
