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Should I consider debt settlement?

Creditors will not even discuss settlement arrangement on any account that has not reached a charge-off status (I9, R9 or O9) meaning that your credit must get trashed before you can reach a settlement. 

Along the way you will experience overwhelming collection calls, potential lawsuits, judgements and maybe even garnishment and liens.   Adding insult to injury, the interest rates and late fees keep piling up such that by the time you settle for ½, your bill has doubled.   Do the math.  You saved nothing and paid the settlement company a fine fee.  

And finally don’t forget you will be presented with a W-2 for the forgiven amount over $600 meaning, yes, you will owe taxes on whatever is settled.   Don’t be fooled.  Settlement is good for very few people except the settlement company.

Should I get a debt consolidation loan?

To obtain a low interest loan to pay off debts usually means pledging the most valuable item a person owns, such as their house. These types of consolidation loans are used to pay off high interest credit cards and concentrate on paying off the secured house loan. Now, while this option may be good for some people, there are a few fundamental problems:

  1. You are betting your most valuable item in the world that you can make all your payments on time, your home. Although almost all debt consolidation programs insist on timely, regular payments, they are likely to be more willing to work with you if you need to make one or two late payments due to a medical or some other emergency. Pledging one’s very home to pay off excessively high interest payments and debt should be avoided.
  2. By taking out a loan, you’re not taking advantage of the breaks on interest and sometimes even the principal that a credit counseling service can negotiate on your behalf.
  3. Finally, research shows that within a year after consumers transfer credit card debt to a secured loan the credit cards continue to be used and actually have higher balances than before the home loan. The FDIC concluded, “…some consumers will increase credit card and other consumer debt after a debt consolidation package is completed, thereby weakening their ability to repay outstanding debts and increasing the likelihood of bankruptcy.”

A debt management plan is easier to obtain than a consolidation loan, as there is no qualification for a DMP.

Should I consider debt settlement?

Creditors will not even discuss settlement arrangement on any account that has not reached a charge-off status (I9, R9 or O9) meaning that your credit must get trashed before you can reach a settlement. 

Along the way you will experience overwhelming collection calls, potential lawsuits, judgements and maybe even garnishment and liens.   Adding insult to injury, the interest rates and late fees keep piling up such that by the time you settle for ½, your bill has doubled.   Do the math.  You saved nothing and paid the settlement company a fine fee.  

And finally don’t forget you will be presented with a W-2 for the forgiven amount over $600 meaning, yes, you will owe taxes on whatever is settled.   Don’t be fooled.  Settlement is good for very few people except the settlement company.

 

Should I get a debt consolidation loan?

To obtain a low interest loan to pay off debts usually means pledging the most valuable item a person owns, such as their house. These types of consolidation loans are used to pay off high interest credit cards and concentrate on paying off the secured house loan. Now, while this option may be good for some people, there are a few fundamental problems:

  1. You are betting your most valuable item in the world that you can make all your payments on time, your home. Although almost all debt consolidation programs insist on timely, regular payments, they are likely to be more willing to work with you if you need to make one or two late payments due to a medical or some other emergency. Pledging one’s very home to pay off excessively high interest payments and debt should be avoided.
  2. By taking out a loan, you’re not taking advantage of the breaks on interest and sometimes even the principal that a credit counseling service can negotiate on your behalf.
  3. Finally, research shows that within a year after consumers transfer credit card debt to a secured loan the credit cards continue to be used and actually have higher balances than before the home loan. The FDIC concluded, “…some consumers will increase credit card and other consumer debt after a debt consolidation package is completed, thereby weakening their ability to repay outstanding debts and increasing the likelihood of bankruptcy.”

A debt management plan is easier to obtain than a consolidation loan, as there is no qualification for a DMP.

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Credit Advisors has been offering debt consolidation programs longer than anyone else. Our certified debt counselors can help you with credit card debt relief, credit card consolidation, consumer credit counseling, bankruptcy certification, bankruptcy questions and all other kinds of help with debt. If you want to get out of debt and have been considering debt settlement, credit management, debt management, credit repair, bankruptcy or consolidation, we provide the best debt counseling and steer you toward a plan that is in your best interest. We are not a loan company, debt settlement company or credit repair organization. We provide credit counseling and plans that work to get you on the road to debt free living.

Credit Advisors Incorporated is licensed to provide debt management plans in the states of Arizona, Colorado, Iowa, Indiana, Kentucky, Michigan, Nebraska, Oregon, and South Carolina.  They are approved or otherwise compliant in Alaska, Florida, Missouri, Ohio, Texas, and Washington.

Credit Advisor logo 4

Credit Advisors has been offering debt consolidation programs longer than anyone else. Our certified debt counselors can help you with credit card debt relief, credit card consolidation, consumer credit counseling, bankruptcy certification, bankruptcy questions and all other kinds of help with debt. If you want to get out of debt and have been considering debt settlement, credit management, debt management, credit repair, bankruptcy or consolidation, we provide the best debt counseling and steer you toward a plan that is in your best interest. We are not a loan company, debt settlement company or credit repair organization. We provide credit counseling and plans that work to get you on the road to debt free living.

Credit Advisors Incorporated is licensed to provide debt management plans in the states of Arizona, Colorado, Iowa, Indiana, Kentucky, Michigan, Nebraska, Oregon, and South Carolina.  They are approved or otherwise compliant in Alaska, Florida, Missouri, Ohio, Texas, and Washington.

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