The Differences Between Debt Management Companies And Debt Settlement Firms

By Author: unknownmem
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But before opting any of them, you need to first assess your financial situation. There are many debt relief companies present across United States that give you a free counseling session and take into account your current income, expenses, debt payments and make an assessment of it. Based on this assessment report, you will be suggested as to which type would fit your debt problems – debt management or debt settlement. The differences between Debt Management and Debt Settlement Firms are as follows. A debt management company provides free or low cost services and helps in maintaining your credit rating while teaching you to organize your finance and budget properly. Through debt management advice, you can rid off your unnecessary expenses and excess dues and pay them off by an affordable plan. A debt management program is offered by an online debt management company or a Credit Counseling agency. They negotiate with the creditors or collection agency and lower the interest rates on your bills, thus effectively reducing your monthly payments. Moreover, they combine all your debts into one so that you need to pay only one monthly ...
... payment which would be quite easy on your pocket while you meet your family’s demands.
Debt settlement on the other hand actually reduces your outstanding debt by 40-70% of your original dues. That means you need to pay only the remaining balances and the rest are your savings. In the process, you save money which otherwise would be paid as interests. By settling your debts, you can effectively settle off all your debts and also do not have to file for bankruptcy. By opting for debt settlement, you will be able to get relief from being called continuously by creditors or collection agencies.
A Debt management plan is recommended if you are having a stable income source and make your debt payments monthly. With this plan you can take advantage of reduced interest rates and do not have to pay late fees or extra charges that were levied on your bills. But if you do not have a stable income and confident of making monthly payments towards your debts even at a reduced interest rate, then the best option would be to choose debt settlement. By opting any of the program, be it debt management or debt settlement, you can become debt free and lead a happy financial life. But, you need to choose the one that suits your financial situation. That way, you can make the most of the option and get it work in your favor.