Understanding Your Debt Settlement Options:

Many people often confuse debt settlement with debt consolidation, but they are in fact two very different approaches working towards the same goal. Debt consolidation works by combining multiple debts into a single loan at a lower interest rate, whereas debt settlement works by reducing the actual balance you owe to your creditors.

Both have their advantages and disadvantages - settlement will normally get you out of debt faster while paying less, but consolidation has less impact on your credit.

Why would a creditor accept any less than the full amount that's owed? Because getting less is better than getting nothing at all.

Every year in the United States, over 1 million people end up going bankrupt. With the exception of Chapter 13 bankruptcies, an individual who successfully files for bankruptcy is absolved from all debts after the few assets they have are distributed through the court system.

Therefore, when a creditor is owed money by an individual that may end up going bankrupt, their options are generally partial or lower payments through debt settlements before it happens; or, if the individual ends up going bankrupt, little to nothing.

Drowning in Debt Feel like you're drowning in debt? You're not alone. Millions of Americans now more than ever are struggling with their finances.

So - under the right circumstances, debt settlement works in favor of both the creditor and the individual struggling with their debts;

  • The creditor is not likely to receive full payment, but they will get more than they would through the debtor claiming bankruptcy.
  • The individual in debt can restore their credit rating while avoiding the hardships of bankruptcy by making the newly arranged payments.

Ultimately, whether you decide to pursue debt settlement help or other alternatives to your financial situation is up to you. Whatever you choose - be sure to do your research carefully before making a final decision, your financial future is at stake.

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