Christian Debt Recovery

Credit Card Debt Amortization Calculator

June 21st, 2011 |

Author: Gavin

Debt Relief Strategies – Credit Consolidation Or Debt Settlement?

There are several debt relief strategies available. However, a consumer need to make sure that the relief strategy used is the best suited for him or her. It has been found that most of the consumers are really confused between credit consolidation and debt settlement. They are not aware of which one to use. This articles tries of explain this to the readers.

Consolidation of credit cards or unsecured loans is to be applied when the number of unsecured loans or plastic money in use are many in number. Here the consumers need to hire professional consolidation firms. When a consumer hires a professional consolidation firm, the consolidator calculates the amount of money that the consumer can bear each month to pay the creditors. Once this is calculated, the consolidator will visit each and every creditor individually and then ask for reduction in the interest rates and elimination of a few associated costs like service fee, late fee and others. This is when the consolidator uses the threat of bankruptcy to force the creditors to agree to the offer made.

The creditors know that if the reduce the interest rates and also take out some of the costs, they will at least get back the whole of the principal money loaned out the consumer and also their will be a steady interest earning. The creditors then re-amortize the loans and then, the consumer needs to pay once every month to the consolidator who then distributes the money among among the creditors.

In settlement, things are different. A consumer hires a settlement firm. The negotiator will actually negotiate with the creditor and ask for elimination of at least 50% of the dues and then the remaining amount is paid to the creditor in bulk. This is when the consumer becomes completely debt free and the creditor then considers the dues to be paid in full. This method works best when the consumers have up to 2 unsecured loans or credit cards.

Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement.

About the Author

www.LegitimateDebtSettlement.com is a matchmaker in the debt settlement industry. They have paired up thousands of consumers up with debt settlement companies who are most likely to get consumers the best deal.

http://www.LegitimateDebtSettlement.com

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