The Debt Settlement process involves negotiating with your creditors to settle your debt for amounts significantly less than you currently owe; typically debt settlement can settle your debts for 40-60% of your current balances. This will save you sizable amounts of money on debt principal and interest. It also provides you with the opportunity to pay-off your debts faster.
Debt cosolidation can be accomplished two ways. The first method is through a debt cosolidation loan, and second through a debt cosolidation service. A debt cosolidation loan provides funds to consolidate all of your debts into one single monthly payment and is traditionally secured in the form of home equity. A debt cosolidation loan reduces the number of payments you have going out monthly and can simplify your debt problem. However, a debt cosolidation loan does not mean you are debt-free; the debts have just been transferred to a new creditor.
Hopefully, this debt cosolidation loan will provide you with a lowered APR and allow you to pay off the new loan quicker. This may sound like a good solution to avoid bankruptcy and get out of debt; however, it can also damage your credit and cause you to pay back far more than if you had selected a debt settlement or debt arbitration program.
Debt cosolidation services claim to provide assistance and guidance for people with debt and credit problems. They claim that they will work with your creditors to provide you lower interest rates and payments. However, these debt cosolidation services spend millions of dollars each and every year on advertising and exist for one purpose only; to ensure that the credit card issuers get paid back every cent that is owed. They call themselves non-profit debt cosolidation companies but, this can be misleading. The bottom line is that these "non-profit" debt cosolidation companies are funded by the credit card companies that they are supposedly “negotiating” with to help you
Alan Barnes
IAPDA Certified Debt Arbitrator
President and CEO of Debt Regret
http://www.debtregret.com
