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Credit Counseling, Debt Consolidation & Debt Settlement: Which Should I Choose?

By: DebtSettlements.com Staff

Selecting the right debt relief program can be a bit confusing. It really depends on the quantity of debt a consumer possesses and their capability to reduce this debt over time. If you are making progress on the outstanding debt but could do even better with a lower interest rate, then debt consolidation could be for you. If your debt load is overwhelming and you can’t even make the minimum payment each month then a debt settlement may be the better option. Learn more about the differences between debt consolidation vs. debt settlement.

Regardless of your debt situation, if you need help in determining the best plan of attack, credit counseling is a great place to start. A good credit counselor will help evaluate your current debt situation and explain which debt relief strategy could be most effective.

How to Choose a Credit Counseling Company

Look for a credit counseling company with experience and a strong reputation. Contact a company with many years of experience in the credit counseling industry and is accredited by the Better Business Bureau with an A+ rating. A good debt relief company can help with the following:

• Analyzing a consumer’s financial situation
• Assisting in getting finances under control
• Teaching budgeting techniques
• Making clients more comfortable with financial topics and terminology
• When necessary, suggesting the appropriate debt relief programs

To contact a debt settlement company and get a free initial consultation from a certified credit counselor, simply submit your contact information at top of the page form. There is no future obligation.

Credit Counseling Scenario #1

John Smith has thousands of dollars of debt on several credit cards at varying interest rates. While he is making payments and his bills are current, John is barely making more than the minimum payment on each card and losing hundreds of dollars to interest charges that he could be saving each month.

A reputable credit counselor might help John negotiate lower interest rates on some or all of his credit cards and then begin shifting outstanding balances on the higher interest rate cards to the lower — both reducing his minimum payment each month and allowing him to save more money.

Credit Counseling Scenario #2

Jane Doe has a $20,000 balance on a high interest rate credit card as a result of losing her job. While she is currently making the minimum payment, the outstanding balance is growing larger every month due to the high interest rate. Soon, she won’t even be able to make the minimum payment as it continues to grow with the outstanding balance. There doesn’t appear to be any way to pay down the debt, especially since she doesn’t know when she will be back in work.

An experienced credit counseling company may look at her present financial situation and recommend trying to negotiate a settlement with her credit card company, rather than continuing to pay money into a debt that will keep growing into what has become an unmanageable situation.

To learn more about which debt relief strategy is right for you, contact us fill out form at top of page for a free initial consultation.

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  • Debt Settlements: Should I Consider Debt Settlement if I Lost My Job?
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  • Settlement of Your Debt: How to Get Started
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