Debt consolidation and debt settlement are methods of helping debtors find relief from significant amounts of debt. These two strategies lead to different results and depending on the relief you are looking for, you may want consolidation or you may want settlement. Debt settlement will actually reduce the amount of debt that you owe while debt consolidation will reduce the number of creditors that you have and also reduce your interest rates as well. Both of these plans will assist in making your debt more manageable and can help you get out of debt. When determining which one you want to pursue, you need to determine the results you want and which method will get you what you need.
Debt settlement will generally result in you receiving a credit counselor and that person will contact your creditors and try to negotiate reduced debt. You may end up paying one lump sum to a creditor, usually less than the debt you owe, and the debt will be considered paid. This process means that you still owe the same creditors money, but the amount that you owe them is less.
Debt consolidation involves taking out a new loan in order to pay off the other loans that you have. The point of doing this is to only owe on one loan and that loan will most likely have a reduced interest rate than your previous loans. This simplifies your payments each month and you no longer owe money to your original lenders. This process is sometimes easier to accomplish because you do not need to negotiate with creditors for cooperation.
In the end, both of these methods of relief can save you money and help you seek relief in your overwhelming amounts of debt. Neither method eliminates your debt, but these are both alternatives to filing for bankruptcy. For help accomplishing debt settlement or debt consolidation, team up with a Wayne County bankruptcy attorney from our firm.
Contact Bryant, Logan, Wheeler Law Group, PLC for the legal guidance that you need!