Debt Settlement And Consumer Credit Counseling Are Not For The Same People
For people burdened with heavy debts there are three primary options; consumer credit counseling, debt settlement, and bankruptcy. This article will seek to take some of the mystery away from the two services known as consumer credit counseling and debt settlement as to make it easier for a person to assess which, if any, best applies to their financial situation.
Consumer Credit Counseling (CCC) is primarily for those seeking financial convenience. CCC reduces interest rates on credit cards whose payments are relatively current. With this service the entire outstanding debt is repaid in full. The program is approved and structured directly by the client's creditors. Under CCC clients typically pay the same amount they are paying now each month. As a result one with a real hardship does not truly benefit from CCC as the month-to-month savings that are needed by such a person are not typically realized. The most significant benefit of CCC is to reduce the total time required to payoff one's debts. As such, consumer credit counseling is best described as a convenient way to get out of debt faster. This convenience is only accessible to those who have debts that qualify and can afford to pay right around what they are paying now each month.
Debt settlement is primarily an alternative to bankruptcy for those with real hardship. This service reduces the total principal to be paid through settling debts "in full". The debt settlement program is structured by an outside agency as to make the payments affordable. Debt settlement creditors are willing to accept a negotiated payoff rather than receive zero should the client file bankruptcy. Debt settlement benefits the client by both alleviating their monthly overhead (and therefore alleviating their hardship) and by also dramatically reducing the total time required to get out of debt. It is therefore best described as an alternative for relief of real financial hardship. This option should be considered for those who have significant hardship and want an alternative to bankruptcy.
Debt settlement and consumer credit counseling have similar goals yet are greatly different in who they serve. Consumer Credit Counseling is an option for those whose situation is such that they afford to have options. CCC prospects do not typcially actually have to choose to do anything at all. Often those who are good consumer, credit counseling can often just as easily choose other options including paying their debts as they are at present. Debt settlement is for those who have few other choices and are considering bankruptcy or just "letting go" and not paying any more creditors to survive. Restricted by significant financial hardship, other options simply don't suit debt settlement candidates very well. These services therefore serve different people. Individuals are typically only able to benefit from one of these programs and getting into the wrong program can make a person;s situation even worse.
Consumer Credit Counseling (CCC) is primarily for those seeking financial convenience. CCC reduces interest rates on credit cards whose payments are relatively current. With this service the entire outstanding debt is repaid in full. The program is approved and structured directly by the client's creditors. Under CCC clients typically pay the same amount they are paying now each month. As a result one with a real hardship does not truly benefit from CCC as the month-to-month savings that are needed by such a person are not typically realized. The most significant benefit of CCC is to reduce the total time required to payoff one's debts. As such, consumer credit counseling is best described as a convenient way to get out of debt faster. This convenience is only accessible to those who have debts that qualify and can afford to pay right around what they are paying now each month.
Debt settlement is primarily an alternative to bankruptcy for those with real hardship. This service reduces the total principal to be paid through settling debts "in full". The debt settlement program is structured by an outside agency as to make the payments affordable. Debt settlement creditors are willing to accept a negotiated payoff rather than receive zero should the client file bankruptcy. Debt settlement benefits the client by both alleviating their monthly overhead (and therefore alleviating their hardship) and by also dramatically reducing the total time required to get out of debt. It is therefore best described as an alternative for relief of real financial hardship. This option should be considered for those who have significant hardship and want an alternative to bankruptcy.
Debt settlement and consumer credit counseling have similar goals yet are greatly different in who they serve. Consumer Credit Counseling is an option for those whose situation is such that they afford to have options. CCC prospects do not typcially actually have to choose to do anything at all. Often those who are good consumer, credit counseling can often just as easily choose other options including paying their debts as they are at present. Debt settlement is for those who have few other choices and are considering bankruptcy or just "letting go" and not paying any more creditors to survive. Restricted by significant financial hardship, other options simply don't suit debt settlement candidates very well. These services therefore serve different people. Individuals are typically only able to benefit from one of these programs and getting into the wrong program can make a person;s situation even worse.
Source...