So, which one is better, debt settlement or debt consolidation?

Debt settlement services help you free your life of stress by ending the harassing phone calls and letters, where as debt consolidation services have helped people by reducing their bills to less than half the amount owed. The families and individuals were able to avoid bankruptcy courts, and their debts were eliminated in as little as three years.

Debt consolidation services claim the consolidation process is simple and free of stress. However, if you have problems with organizing, then you may feel a sense of stress because you must be organized to get the help you need. On the other hand, the counselors are qualified to negotiate on behalf of yours, asking for lower payments and lower debts, sometimes even up to 70%. This will provide you with lower monthly installments.

The balances you have to pay to eliminate your debts are based on your income, and are often determined by 75% living costs. In other words, some debt management companies determine how much money you can afford to pay the creditor after they figure the price of living. However, if you have mortgage payments, then this will reduce the percentage of living costs, since the mortgage is a source of living and a source of debt. Legally, it is against the law for any company to take more than you can make. Any service that offers debt relief or other types of service must factor in your cost of living. Of course, the counselors will help you to cutback on your spending during the settlement process, thus helping you to increase your source of income.

Tags: debt management, unsecured debt consolidation, debt consolidation information