Comparing Debt Settlement and Credit Counseling | Credit ...

B? Bobby Zangrilli

Credit counseling ?r debt settlement? Wh?l? naturally I ?m inclined t? argue ?n behalf ?f debt settlement over credit counseling, I ?l?? recognize th?t ?t?s impossible t? declare wh??h program ?? better b?????? ?t depends ?n a number ?f variables th?t differ fr?m individual t? individual. Th? purpose ?f th?? article ?? br??k down wh??h factors ??? ?h??ld consider before choosing th? appropriate option.

1. Wh?t ??n ??? afford? Credit counseling programs tend t? b? a lot more expensive th?n debt settlement programs. Th? reason ?? simple: credit counseling ?nl? produces results ?n th? interest rates, whereas debt settlement ?? ?bl? t? actually negotiate th? amount ??? owe. Simply ??t, ?f ??? ?r? ?n a tr?? financial bind, th?n th? clear ?h???? f?r ??? ?h??ld b? debt settlement, ?nd ?n a pure ?money saved? basis, debt settlement w?ll ?lm??t always b? th? ?n?w?r. Although th?? ?? undoubtedly ?n ?m??rt?nt factor, ?t ?? n?t th? ?nl? variable t? consider before m?k?ng a d??????n ?n wh??h program ?? best f?r ???.

2. Wh?t sort ?f credit impact ??n ??? tolerate? S?m? credit counselors out th?r? w?ll undoubtedly tout th?t th??r program d??? n?t affect ???r credit score negatively. Th?? ?? a play ?n words. Sure, ???r score won?t drop, b?t ??k ?n? lender wh?t th? impact ?? t? ???r loan application. L?t m? save ??? ??m? time??t?s devastating. Th?t being ???d, debt settlement ?? n? better f?r ???r credit, ?nd lenders ?n general d?f?n?t?l? d? n?t l?k? seeing debtors seeking outside h?l? f?r th??r financial situation. On th? flip side, th?? d?f?n?t?l? d? n?t l?k? seeing th? past due m?rk? fr?m enrolling ?n a settlement program. S? l?t?s consider th?? example: Four years ago, John d???d?d t? ??? credit counseling, ?nd Mary d???d?d t? follow th? debt settlement path. Th?? both h??? th? same income ?nd expenses, ?nd th?? both apply f?r a $200,000 mortgage. Wh? ?? more l?k?l? t? g?t ?t?John, wh? ?? 1 year away fr?m completing h?? credit counseling program, ?r Mary, wh? f?n??h?d h?r debt settlement program 1 year ?nd half ago ?nd h?? ??n?? b??n rebuilding h?r credit? Wh?l? th?? m?? vary fr?m lender t? lender, ?n general Mary w??ld b? considered th? better loan applicant. Wh?t ?f John paid a lot per month ?nd th?? both f?n??h?d th??r respective programs ?n th? same amount ?f time? B? itself, th? credit counseling program w??ld b? better f?r ???r credit, b?t wh?n ??? factor ?n th? fact th?t Mary w??ld probably h??? more savings t? contribute t? a down payment, ?h??d still probably b? considered th? better loan applicant. D? I th?nk th?? ?? f??r? N?t ?t ?ll. It?s ridiculous th?t lenders ?r? ?? harsh ?n clients ?f credit counseling programs. Unfortunately, th? system ?? flawed, b?t until th?r? ?r? adjustments m?d? t? ??rr??t ?t, debt settlement clients w?ll b? ?n a more favorable position t? obtain n?w credit upon completion ?f th??r program.

3. Wh? d? ??? owe? S? ??? ??n save more money ?n debt settlement, b?t n?t always. If ??? owe a more aggressive creditor l?k? Citibank, th?n ?t?s possible th?t credit counseling ?r bankruptcy m?? b? a better option f?r ???. Th? reason: Citibank n?t ?nl? tends t? settle f?r more ?n average, b?t th?? ?r? ?l?? more l?k?l? t? pursue legal action t? collect a debt. Although under m??t circumstances debt settlement ?? still successful w?th th??? creditors, ?t ?? a much riskier undertaking wh?n ????re dealing w?th Citibank. If ??? ??nn?t afford credit counseling ?nd ???r debt ?? exclusively w?th Citibank, th?n unfortunately ????re probably better ?ff filing bankruptcy.

4. Wh?t ?? ???r personality type? I?ve read ???t ?b??t ???r? article online regarding credit counseling versus debt settlement, ?nd I?m amazed b? h?w m??t finance authors eliminate th? human element fr?m th?? discussion. Th? bottom line: debt settlement ?? n?t f?r th? faint-hearted. Th?r? ?? n? guarantee th?t everything w?ll work out completely ?? ?l?nn?d. S?m? settlements m?? b? higher th?n estimated. S?m? settlements m?? b? lower th?n estimated. Y?? w?ll inevitably g?t ??m? creditor calls. Th?? ?? th? nature ?f th? program, ?nd ??? m??t b? willing t? accept ??m? level ?f uncertainty before enrolling.

I organized th? following 4 q???t??n? ?n th?? order ?n purpose. Aft?r ?ll, ?f ??? ??n?t afford credit counseling, th?n ?t?s pretty much out ?f th? picture ?? ?n option f?r ??? anyway. I don?t mean t? sound overly cynical, b?t w? live ?n a material world ?nd issues l?k? having ?n anxious personality m??t b? sacrificed wh?n ??? don?t h??? th? money n??????r? t? freely exercise th?? aspect ?f ???r character. On th? flip side, ?f ??? h??? 100% Citibank debt, ?t w??ld b? foolish f?r ??? t? ?h???? debt settlement over credit counseling ?r bankruptcy ???t b?????? ??? fancy yourself a risk-taker.

Source: http://www.aldameergaza.org/comparing-debt-settlement-and-credit-counseling.html

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