How To Chose Between Debt Reduction And Consolidation
With individuals facing an avalanche of debt more and more are looking for and exploring methods to reduce their debt
. Today there is approximately 15 million unemployed in the Unites States and that has resulted in a severe strain on both individuals and credit card companies. In the face of reduced monthly income many find that they cannot even pay their minimum monthly payments much less pay the entire balance. Credit card issuers are facing increasing losses and are choosing to negotiate and receive lesser amount can under the circumstances.
Among the solutions being sought by individuals is debt consolidation, which is a method taking all ones bills and combining them under one loan. This works exceptionally well if the debtor is able to include his home as collateral. This results in reducing the interest rates substantially and the life of the loan. It a good method and the savings can be excellent
A second solution for those that are in debt for more than $10,000 is to seek debt reduction. This is the method of were the amount and terms, such interest rate, is negotiated with the creditors. The reduction of debt can be from 20% to 70% of the original amount, but is different in each situation. Will you credit score affected? Most likely, but that can be negotiated also and there are good companies for credit repair afterwards. A good credit score is of no use if you cant make your payments and will be affected if you fall behind anyway.
The method you choose depends on the amount of debt and the circumstances you find yourself in. If you own a home and have income, then you may want to opt out for debt consolidation and save your credit score. If you income has been greatly reduced and you dont own any property, then debt settlement may be the best option for you.
In either case it is imperative to get you financial situation under control and reduce the stress that it produces. There are solutions and companies that are willing to help you achieve your goals. If you like to see the companies we recommend for attaining your financial freedom, please visit us http://www.debtadvicespecialist.com and http://www.debtadvicespecialist.com/consolidations
by: Irma Medina
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