Debt settlement, debt relief and credit counselling – weigh the options well before choosing one

Debt settlement companies are different from debt relief companies in that it works to achieve different financial objectives. It is essential to understand how these companies work so that you would know which option would work well for you.  When you are embroiled in debts, the first lesson to learn is that you must not press the panic button. Keep your cool, know what options are available, understand it well and then make a choice. Avoid any knee-jerk reaction to an already stressful situation because it would only multiply the stress.  Debt relief companies do not work in the same way as credit counselling companies or debt settlement companies.  Each one is different, as you would understand by reading this article.

Credit counselling services

 Providing money management advice is the primary objective of credit by Marcus J Debaise counselling companies. These companies conduct workshops and educational courses to educate people about managing money in a better way.  By talking to the counsellors, you gain valuable knowledge and understand the modalities of money management. You discover new ways of doing things better. You might be already practising some of it but could do much better with the inputs from counsellors. The counsellor takes into account your financial position and then develops a plan created for you exclusively. Depending on the extent of debts, the counsellor suggests a debt management plan that makes monthly payment easier. They could also execute the plan on your behalf.

 Debt relief companies

The working ways of debt relief companies somewhat match that of credit counsellors but extend further. These companies offer debt relief programs like the ones you find at  The debt relief companies handle a much-enlarged portfolio than credit counsellors as they, not only counsel clients and advise them but also arrange for debt consolidation loans. You take a new loan that helps to wipe out all other loans so that several loan accounts get converted into a single loan. It makes life easier as you can handle the new loan much better now that you need not deal with several lenders and maintain varied payment dates every month. Consolidating the loans provides much relief because you can keep away from the dreaded path of declaring bankruptcy.

Debt settlement services

 Debt settlement services work with the objective of putting an end to the present debts without taking a new loan.  The debt settlement company will take you through the process of negotiating with lenders to bring down your total debt. They would force the lenders to come to the negotiation table by creating a situation that tells lenders about your inability to pay back loans. The process begins by stopping loan payments and keeping the money aside in an escrow account.  The debt settlement company then approaches the lenders, convince them about your inability to pay back and make them accept a small part of what you owe while writing off the balance as bad debts. 

Once the deal is through you can use the accumulated fund for settlement.

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Eva Vergis

Eva Vergis is a notable and influential lifestyle writer. She is a mom of two and a successful homemaker. She loves to cook and create beautiful projects with her family. She writes informative and fun articles that her readers love and enjoy. You can directly connect with her on email id- [email protected] or visit her website