Bankruptcy vs debt consolidation, which one is right for your current debt problems?

It is not by accident that credit card companies make multi-million dollars every year, it is only your growing credit interests and minimum payments that have made this possible. If you see yourself shelling out a large chunk of your hard-earned money to pay your credit card dues, yet are unable to come out of your debts, then it is high time for you to look for other alternatives.

If you thought that debt consolidation is the only way to settle your debts, think again. There is another effective method by which you can pay off your creditors and it is debt settlement.

If you’re seeking an alternative to bankruptcy due to excessive debt that you can’t pay, you may be considering debt settlement. Settling your debt is when you negotiate with your creditors to lower the amount you owe. While there are a number of debt settlement companies that exist to help you get rid of your debt – you may be better off doing it on your own. There are many risks associated with using debt settlement companies, including outrageous fees for their services.

For those with large amounts of debt ($10,000 or more), debt settlement has become a great asset over the past few years. If you’re in a place where the bills are piling up and you just don’t know how to deal with them anymore, a debt settlement program might be just the thing for you. 2-4 years is about the average completion time for a debt management program. A program is set up and structured so that those in financial distress can get back on their feet.

The way it works is that you gather all your unsecured debts together and provide that to the debt counselor. They set up an arrangement wherein you make one lump sum payment to them and they in turn distribute that money amongst your creditors. If you have secured loans you would have to refinance those with a debt consolidation loan.