Selasa, 07 September 2010

Easy Ways To Get Out Of Debt – Debt Consolidation Vs. Debt Settlement

Sometimes it seems as if this financial crisis will never end. More and more people are struggling to cope with their bills and finding easy ways to get out of debt has truly become a struggle for the majority of people. Well, I am here to let you know there is hope; and in this article I am going to reveal the top two choices for slashing debt and ridding yourself of some of the stress caused by financial worry.

Top Choice #1: Debt Consolidation
Debt consolidation involves the pooling of all your existing debt into one manageable monthly payment. The setup is usually run by a consolidation company, who arranges for the pooling with all your lenders. This company then effect becomes the sole lender that you owe money to. The huge benefit here is that you'll have one single payment to make instead of many. Although it won't be a huge reduction overall compared to what you used to pay, you'll nonetheless get some 'breathing room'.

Of course there are drawbacks, as with most things in life and with consolidation you are likely to pay a high premium for the service. You could also find that the overall time taken to pay off the new 'bundled debt' is longer. Which leads me nicely into the next alternative...

Top Choice #2: Debt Settlement
First, don't let my listing this choice at number two fool you about it's importance. In fact, it is the preferred choice so consider it my 'saving the best for last' so to speak. Debt settlement works by negotiating a overall reduction in the total amount owed to the lender. So if your overall debt is $10,000, a possible settlement could see perhaps $6000 being written off the loan. Companies do this when they feel that there is no possible way you'll be able to sustain your debt, and instead of losing all, cut their losses and recover some of the money.

This way of getting rid of huge chunks of debt is extremely popular nowadays. It is so popular that a raft of companies have sprung up online to deal with the boom in business. Considering that you get instant debt relief, I hope you can see why I recommend it over consolidation as an option.

The two options I have outlined above are really easy ways to get out of debt. I highly recommend that you first start off with a free debt evaluation in order determine which option is better for you, based on your own financial situation.

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