Differences Between Debt Consolidation
and Settlement of Debt
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Disclaimer: While we have done our best trying to give you all
information you need in order to consolidate your debt the right way,
it is highly suggested you get seasoned advise coming from debt
consolidation and debt settlement specialists, this is the safest way
to get your finance back in order, plus in the shortest period of
Differences between Debt Consolidation and Settlement of Debt
When looking into whether you should invest in either debt consolidation, or a
general settlement of debt you need to understand exactly what each plan is and
what the differences are which they provide.
What is debt consolidation?
Consolidation is where a independent individual or family who is under a
significant amount of debt with multiple companies, sits down with a consolidator
and makes an agreement as to where the consolidating company will pay off
multiple debts, in return requesting the individual to sign an agreement to pay
back this total amount paid off on your debts to the debt consolidator.
To put this into simpler terms a consolidation is where a company offers customers
the opportunity to turn many different separate debts into one debt, with one
company. Usually the consolidation service will require you to sign over a piece of
collateral in equal or greater value to the debt which is taken out with the
consolidation loan. Some companies will also allow a loan without collateral, but
the interest rates will be defaulted to a much higher amount.
What is a settlement of debt?
Debt settlement is where instead of a plan to create a monthly payment with
another company, you are making a deal with a company when faced with
bankruptcy to receive a discount on a total debt as long as you can pay off this
discounted debt in full. A debt sett