www.howtosettledebt.org When you need help with credit card debt, is debt settlement or debt consolidation a better solution for your debt problems. Debt settlement and consolidation reviews.

Most debt consolidation companies do nothing better than simply ruin your fico score in order to settle your debt. If you really want to work with an agency that will help you reduce your debt, contact a company member of “CONSUMER CREDIT COUNSELING SERVICES” (CCCS) More info at: sccrealestateuncensored.com/2008/repair-credit-legally-remove-negative-accounts/ micasamidinero.com/2008/reparo-credito-eliminando-legalmente-cuentas-negativas/

Debt consolidation loans increase your risk of incurring additional debt, while debt settlement reduces your risk of incurring more debt and pays off existing debt. When you use debt consolidation, you still pay the entire debt principal plus interest. However, debt settlement allows you to pay about half your debt principal and no interest, which results in quicker debt relief.

The two most popular methods of debt consolidation involve secured and unsecured loans. Secured loans require you leverage collateral against repayment. If you default on a secured loan, the lender can sell your collateral.

Secured loans are popular ways to finance debt consolidation because you can use your home or vehicle as collateral. Two benefits of using a secured debt consolidation loan are low interest rates and large payouts.

Unsecured loans for debt consolidation can be difficult to acquire because they require extensive credit checks. If you have bad credit, the lender can refuse to loan or levy a high interest rate.

The many risks associated with debt consolidation, whether it’s with secured or unsecured loans, often lead debt-burdened consumers toward enrolling in a debt settlement program. Debt settlement helps you pay off high-interest debts in a short time. With debt settlement, you do not need collateral or even a loan, and the enrollment process involves no credit check.

Debt settlement offers you rewards unmatched by other debt-relief methods, including debt consolidation. Debt settlement companies charge a negotiation fee based on the client’s savings, which ensures the company works entirely on behalf of the client.

For borrowers suffering the many humiliations large and small of debts increasing beyond their control, there are actually several different forms of debt relief available to average consumers. What may surprise most Americans, actually, is the extent to which bankruptcy will no longer be considered among the debt relief alternatives that seasoned financial advisors recommend to most clients. Three years ago, while the economy was still relatively robust and the media was distracted by Iraq war coverage, the congress slipped in a few seemingly minor alterations to the United States bankruptcy code that went on to weaken tremendously the protection available. Unfortunately, at this present time, with debt loads, inflation and unemployment spiraling even as property values fall across the nation, consumers are only now beginning to understand that the Chapter 7 debt elimination program they had always assumed to be a final outlet for unpayable burdens may no longer exist.

The full meaning of this legislation would take far too long to fully explain, but, suffice to say, court trustees must now strictly follow Internal Revenue Service guidelines before rendering any decision on the feasibility of Chapter 7 protection. Worse yet, even for those few borrowers whose incomes are sufficiently low for Chapter 7 to be a practical consideration, those that somehow manage to successfully declare for the debt elimination program will find that virtually all assets (including, by the viewpoint of the Internal Revenue Service, the computer you are reading this article on, the table that supports that computer, the rug underneath said table, and so on) are now subject to potential seizure for auction so as to immediately repay their creditors. Every consumer that fails to meet the new and comically harsh standards for Chapter 7 bankruptcy protection will instead be passed toward the Chapter 13 debt re-structuring program. This is, indeed, a form of debt relief, but, as with anything controlled utterly by governmental regulations that ignore the day to day needs of private citizens, it is debt relief of absolutely the ugliest and most damaging sort.

After a bankruptcy notice appears on the credit report, borrowers will at least never need to worry about debt relief again. After the recording of a Chapter 13, even though essentially all bills will be paid by the filer and rather more quickly than would be pleasant, said borrowers will never again have the opportunity to be offered credit accounts for many, many years. Even used car salesmen will back away, shaking their heads. To put it plainly, Chapter 13 has all the deprivations and forced budgeting of the harshest debt settlement programs alongside the credit shattering repercussions of debt elimination bankruptcy. The program does, in the loosest possible sense, offer some relief to debtors utterly without any other hope. There will always be a final outlet. Still, Chapter 13 should not even be talked about in the same breath as debt consolidation or debt settlement. It simply has no possible advantage or benefits compared to the other debt relief alternatives. Compared to robbing a liquor store or selling one’s organs, Chapter 13 protection may come out on top as a sound lifestyle choice, but only just.

Certain types of debts will qualify for debt consolidation and/or debt settlement, while others must be paid outside of the program. When deciding how to best handle your need for debt relief, it’s important to know which types of bills can be included and which cannot.

When it comes to debt, there are basically three different types. These include unsecured, secured and government. Unsecured debts include credit cards, personal loans and other types of bills that are not secured by some type of collateral. As you may expect, secured debts include a mortgage or auto loan because the loans are secured by valuable property. Certain types of charge accounts, including those obtained at furniture and/or electronic stores, are also secured because the lender retains a “security interest” in the item(s) with the right to repossess the property if it is not paid for. A government debt includes student loans and/or taxes.

Now that you are familiar with the various types of debts, it’s important to know which ones are eligible for debt consolidation and/or debt settlement services. The most common reason that people will enter into either of these programs is because of high interest credit card debt, which means unsecured debts are eligible for debt relief programs. Secured debts, as discussed earlier, are not eligible and must be paid outside of a debt relief program. A mortgage or auto lender will not be willing to negotiate a debt settlement or lower payments and interest for the life of the loan. Government debts are also not eligible for debt consolidation and/or debt settlement services and, too, must be paid separate from the program.

If you are in need of debt relief and consequently are considering a debt consolidation or debt settlement service, the non-profit agency handling your debt negotiations will be able to answer questions regarding which additional debts may or may not be eligible for inclusion in your program of choice.

When you sign up for either a debt consolidation or debt settlement service, it’s a good idea to place all of your unsecured debts on the program. Most non-profit agencies will recommend this due to the fact that creditors may feel that you are being selective in which debts to single out and request lower payments and/or interest from. If you are in true need of debt relief, your best bet will be to place all of your credit cards on the program and eliminate all of your debt at the same time. If any creditors find out that you have not placed every eligible debt on the program or if you start the program and then apply for another credit card, they may revoke your lower payment and/or interest and return your account to past due status. At the very least, they may refuse to accept the proposed debt relief plan. In a worst case scenario, the creditor could return your account to past due status and begin charging penalty interest once again.

In conclusion, if you are planning to enroll in a debt consolidation and/or debt settlement program, include all eligible debts and avoid applying for new accounts until all of your old ones are paid in full through the debt relief program.