Debt Consolidation and Debt Negotiation

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Bill Consolidation Company and Debt Management Programs
A bill consolidation company takes the hassle out of managing your debt. They handle your monthly payments, negotiations with your creditors, and repayment strategy for a small fee. Through reduced rates on your bills, debt management companies can save you years on debt payments. But before you sign up with a bill consolidation company, make sure they are skilled and have reasonable rates.
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Debt Burden - Unsecured Debt Consolidation Loan
You have a number of credit card dues to pay. You have not been able to repay the loan you had taken to buy a car last year. You have also not paid back the debt of your recent holiday trip. The burden of loans is increasing and the interest amount is multiplying. As you don't have any property to be kept as collateral you cannot take a secured loan to repay your all outstanding debts. The situati... Read debt consolidation article



Debt Consolidation and Debt Negotiation
Debt consolidation versus debt negotiation are two options that are available to you if you need debt assistance. When your monthly bills become too much for you to handle, it makes sense to use debt consolidation or debt negotiation for solving debt and credit problems.

Debt Consolidation

Debt consolidation services have prearranged debt repayment plans with most credit card and collection companies. When you sign up with a debt consolidation company you are offered a lower overall monthly payment based on a lower interest rate they have arranged with the creditor.

This payment is lower than what the credit card companies offer you, saves you money every month and is often the best way to consolidate debt.

One benefit of a debt consolidation repayment plan is it will stop you from getting harassed by your creditors as long as you make the new, lower monthly payments.

The downside of the debt consolidation repayment plan is that you have to cancel all credit cards that you include in the plan. You are also charged your first payment you make toward the program and an additional monthly administration fee. This administration fee ranges from flat fees of $10-$50, while others charge a $5 fee for each creditor. That means you'll pay about $30 a month that doesn't go to paying off your debts.

The debt consolidation program benefits you if you have high interest rates or have higher credit card bills than you can manage. Some people like to make only one payment to one company for all of their debts.

Debt Negotiation

Debt negotiation is sometimes referred to as debt settlement. This is most often offered to people who can't handle a debt consolidation program. If you can't make the minimum payments of a debt consolidation repayment plan or haven't made payments in the past 3 months, a debt negotiation program is the next step for solving debt and credit problems.

One benefit of a debt negotiation program is you stop making payments to your creditors. The debt negotiation company either takes monthly payments from you and keeps it in an account, or lets you keep the money in your own account.

While you are making these monthly payments to the debt negotiation company, they negotiate with your creditors for a lower payoff of around 40-50% of your total amount of debt. Once the negotiated settlement is agreed upon with your creditors, the debt negotiation company makes a one time payment to them.

A downside of the debt negotiation program is it lowers your credit score for as long as you are in the program. However, most debt negotiation companies require the creditor make the credit report show paid in full so it doesn't show up as a negative on your report once your account is settled.

Some debt negotiation companies include a credit repair service that will remove the negative items caused by the debt negotiation program. You pay for this service as part of their program.

Now that you have an idea what debt consolidation versus debt negotiation is choose which one will work best for solving debt and credit problems for you.

Copyright © 2005 Credit Repair Facts.com All Rights Reserved.

This article is supplied by http://www.credit-repair-facts.com where you will find credit information, debt elimination programs and informative facts that give you the knowledge to correct your own credit and credit report. For more credit related articles like these go to: http://www.credit-repair-facts.com/articles_1.html

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Eliminate Your Debt Forever

Want to know if your attitude towards your finances is helping you or damaging your future? Take this Quiz and find out...

I consider myself out of debt when:

1.I don't owe anyone anything
2.I don't owe anyone, except for a mortgage and a car loan
3.I could pay off my credit card debts at any time
4.I'm making all my minimum monthly payments on time

If my friend told me he had several credit cards with all zero balances, I would think:

1.He's very disciplined
2.I should ask him for some tips
3.He must not have much fun
4.What a waste of a lot of unused credit

My bill paying system is to:

1.Sit down each Sunday night and pay what's due in the next ten days
2.Check the pile of bills every few days and pay any that are past due
3.Wait until three days before the ten-day grace period expires
4.Pay a bill when the company calls to remind me I'm late

If I find myself in a financial pinch, I:

1.Reduce my spending and don't charge anything
2.Get a part-time job and pay down some debt
3.Don't worry, just charge everything
4.Don't worry, my dad always helps me out

When we need a new appliance, my spouse and I:

1.Review our budget to decide when we can afford to pay cash
2.Review our budget to make sure we can afford the payments to charge it
3.Go to the store together and get the appliance we want
4.Go to the store separately and each get what we want, to surprise each other.

I pay off my credit cards balances:

1.Every month
2.Every two or three months
3.A couple of times a year
4.Never

When I buy a new car I'll:

1.Trade in my old one, add a big down payment, and pay the rest with a car loan of three years or less
2.Trade in the current one and pay the rest with a five-year car loan
3.Lease
4.Trade in my old car, which is worth less than I owe on it, and roll over the balance into a six-year loan for the new car

I believe that using professional financial services:

1.Is a good way to learn how to accomplish your goals
2.Is okay for people with complicated finances
3.Is something I'd consider if I had more time
4.Is only for rich people

If something is innacurate on my credit report, I:

1.Call immediately to find out how to dispute it
2.Wait till I have some spare time to call and inquire
3.Order my report again next year and see if it changes
4.Forget about it since it's out of my control

I feel financially comfortable when I:

1.Have a secure income, savings, a growing retirement account and enough insurance coverage
2.Have a good job
3.Have enough money to pay my monthly bills
4.Can get approved for a loan for a new car

To Get the results for your quiz, only go to http://excellentcreditnow.com/QuizResults.html and get the score for your Test and what does it mean to you for FREE.

Copyright © 2005 Excellentcreditnow.com - All Rights Reserved

Carmen Shearer is the President and CEO of S&S Financial Solutions. She has worked in the finance arena for over 10 years and holds two engineering degrees and an MBA from a branch of Harvard Business School. S&S Financial Solutions offers you credit repair tools, debt elimintation programs and personal financial information with a 90 days guarantee. For more credit related information go to: http://www.excellentcreditnow.com or for how to eliminate your debt go to http://www.excellentcreditnow.com/NoMoreDebt.com


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Debt Consolidation and Debt Negotiation
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