Debt Consolidation vs Debt Settlement

From Slough, 7 posts

I'm in a bit of a pickle at the moment and was wondering if anyone has any thoughts on the pro's and cons of Debt Consolidation compared with Debt Settlements.



Any help gratefully received.

From UK, 2 posts

Originally posted by The Geek on 30 Mar 2006 4:23 PM


I'm in a bit of a pickle at the moment and was wondering if anyone has any thoughts on the pro's and cons of Debt Consolidation compared with Debt Settlements.





Any help gratefully received.






My advice would be to avoid debt management companies wherever possible. If you're absolutely desperate though, www.debtconsolidationloanquote.co.uk gives you a good idea of what your repayments would be if you did go down the debt consolidation route.

From Uk, 2 posts

Debt settlement services is negotiate your debt down with the collection agencies that have been given your case.Offer debt settlement programs through arbitration. The "selling point" when it comes to these kinds of solutions is that debt settlement will actually help end your debt problems, without having to go through declaring bankruptcy, without having to pay overcharged debt consolidation program fees

From Atherton,California, 3 posts

A good plan can be devised by taking the advice of a credit counseling agency. They help in lowering the interest rates and extending the term of loan by negotiating with the creditors.



Alice

From UK, 21 posts

No debt management companies are not really a good option. There are other options other than consolidation but you need get advice perhaps start with citizens advice.



If you have got no asset / property you own. The government changed the rules on bankruptcy a couple of years ago, so now you can go bankrupt for a year, job done... Be careful though if you own property you still have to repay the debt



If you own a property, however, and have equity more often than not a debt consolidation loan can work a treat. Just remember you are often transferring short term unsecured debt on to long term secured debt. You may also want consider a remortgage the same still applies but discuss both options.

From UK, 18 posts

HI,

these are some sites which are serving in United Kingdom

you can get Free advice from all these sites.

and any kind of debt service is available here Debt management & Debt consolidation



Debt consolidation in UK

Debt Help in UK

From UK, 3 posts

Hi



I would say sonsolidate your debts by gettin a mortgage to pay all your debts this way you would have just 1 payment coming our of your account. try an find an independent mortgage adviser who can search the market an find you the best deal. i would recommend you visit www.999moneyhelp.com fill out the online application form an this guys will contact you. I only recomend him cuz he helped me alot when i needed a mortgage.



Im sure he will make you a saving on what your paying right now an get you the best posible rate available.

From Asia, 3 posts

Originally posted by The Geek on 30 Mar 2006 4:23 PM

I'm in a bit of a pickle at the moment and was wondering if anyone has any thoughts on the pro's and cons of Debt Consolidation compared with Debt Settlements.






I have heard good reviews about Debt Consolidation. It usually lowers the interest rate and extends the repayment period for your loans.

From London, 5 posts

Debt Consolidation is not such a bad thing. It helps you manage your finances better by combining all your debts to reduce your monthly payments. You can usually agree with the debt managing company on what you can afford to pay on a monthly basis. The debt management company charges a small fee for their services which is included in your affordable monthly payment and they are quite good at keeping creditors off your back and making sure that your payments are distribute amongst your creditors. They also arrange for your interest and charges to be frozen, which means you may end up paying less for your loans. It is good to shop around and to make sure that your are offered the best deal before you go ahead. Visit www.communityadvice.co.uk for a few options you can compare.

Good luck

From UK, 17 posts

Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan. Debt consolidation can simply be from a number of unsecured loans into another unsecured loan, but more often it involves a secured loan against an asset that serves as collateral, most commonly a house. In this case, a mortgage is secured against the house. The collateralization of the loan allows a lower interest rate than without it, because by collateralizing, the asset owner agrees to allow the forced sale (foreclosure) of the asset to pay back the loan. The risk to the lender is reduced so the interest rate offered is lower.

Debt Settlement is an aggressive approach to debt reduction, which may be appropriate for debtors with serious amount of debt and are considering bankruptcy. A debt settlement agency negotiates with the creditors to settle the debt for a lower amount than owed, as the debtor saves their money for a lump-sum settlement payment. After the debt is settled, the creditor will send a letter stating the debt obligation was fulfilled, and will report to the credit bureaus that the debt has been, “Settled for less than full amount”, “Paid” or “Settled”. Creditors will usually only settle for less than owed when the debtor is under serious financial strain because if the debtor chooses to file bankruptcy, then the creditor gets nothing. If no financial hardship is evident the creditor may choose to take legal action.

I would recommend consulting a professional company. I have used http://www.idealfinancesolutions.co.uk in the past and found that they were very helpful.