Each and every day you are bombarded with ads touting how the government rescued all these companies and now it is your turn. Okay so who is behind these ads? Believe it or not, a lot of times it is the very creditors’ debt consolidator. This means that the effort is skewed in the favor of the companies that you owe money to. Not a good situation to be in.

This approach is usually involving credit counseling and debt consolidation. Some of these organizations are no more than disguised debt collectors masking as your way out of debt. Can you see where what you thought was doing the right thing in regard to improving your debt situation will not be in your best interests? Companies looking out for your creditors instead of you is upside down to say the least.

Great you say, now what? There is another popular method of debt reduction and it does not involve a debt consolidators or credit counseling. This type of debt reduction is known as debt settlement. The big difference is that certifiable and legitimate debt settlement companies will actually work for you and not your creditors. Basically, companies that are customer oriented toward debt settlement are on your side and not your creditors.The significant fact is that good companies involved in debt settlement actually are employed on your behalf and do not care about your creditors. Now we have something a little more fair.

The main advantages over a debt consolidator and counseling is the fact that your creditors will agree to a settlement and the process is much quicker. The other important issue is the fact that with consolidation you may have to use your home as collateral. This process can take up to 5 years or more and will cost you more money in the overall.

Let’s assume you owe $30,000 in debt. With counseling you could be paying $42,000 to satisfy the debt. If you were to just make the monthly minimum payments you would be paying about $102,000. Where debt settlement comes into play is that with this method you could figure paying between $16,000 and $20,000 and do it in 12 to 36 months.

The last alternative is bankruptcy which has become more difficult for us average folks to get our debts erased. You can now see the advantage that debt settlement has over debt consolidators or counseling methods. The main point is that it all comes down to money that you have to pay. Check into debt settlement before you sign up for a debt consolidator or debt counseling.

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Tags: debt consolidation, debt cosolidator, debt relief

This entry was posted on Tuesday, December 22nd, 2009 at 12:45 am and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.