Debt Settlement Vs Debt Consolidation – The Right Choice To Make
The choice between debt settlement vs. debt consolidation isn’t as tough as it initially might seem. But you must be aware that to arrive at the right decision to make, you must first weigh all the consequences that may apply to you, whichever option you might settle for. So it is key that you equip yourself with the right amount of knowledge when it comes to the advantages and drawbacks between debt settlement vs. debt consolidation.
Debt settlement can help you eradicate a portion of your debts from your current creditor. With this, you can be assured of instant relief when it comes to your monthly finances, while at the same time making the rest of your debt payments much easier to handle.
It can also start helping you build up your credit again. Debt settlement can surely help you handle your credit standing better because you will be able to firmly juggle your late payments and high amounts from debt loads.
However, its downside lies in how it can affect your total credit score. This option is seen shares similarities to the foreclosure concept. You may be able to ameliorate your score at present but in the long run, you might have to work harder with your sub lenders. You also have to be ready to face the effects it will have on your taxes. The IRS pays close attention to debt settlement and you might find yourself paying extra taxes depending on the state you live in.
Debt consolidation on the other hand can also get you out of the rut of debt. The consolidation company of your choice will help in lowering your monthly rates with the rest of your creditors. You will be able to settle your monthly payments into just one overall debt. The company will also work on the paperwork troubles, cancellation fees and accounts that might come to a screeching halt. It will generally help you overcome your debts in five years time.
The downside of debt consolidation is that it won’t help much with building up your credit score. They will hold a temporary restraint on your credit if you can’t make regular payments. So you will have to push your efforts on monitoring your current accounts so that you will see if the consolidation company is really making your payments on time.
There is surely no easy way to get out of debt as fast as you might like. But having a choice between debt settlement vs. debt consolidation can really help a lot. Both can do great things in helping you improve your financial standing and lessening your financial worries. Both can simplify the complex process of the entire concept of debt and you won’t need to go through anymore sleepless nights over your seemingly devastating financial standing.
All you have to remember is to do the proper research and weigh all the available options well. There is no magic potion for getting out of debt. All you need to do is stay smart, wise and strong to deal with it head on.