What is the difference between consolidation and debt settlement company?

Jul.11, 2009 in Debt Consolidation

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I called creditsolutions a minute ago and they told me that they are not a consolidation company. I told them that I have a debt for 16,000. They told me that they can get my debt company to settle for 9,800. and they charge a 15% fee. Does this sounds okay. Please recommend me to some other company but not consolidation I do not want to consolidate I want a debt settlement company. That I would still pay, I heard when these consolidation company pays for me It haunts my credit score.

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5 Comments on “What is the difference between consolidation and debt settlement company?”

floridaman39us
July 13th, 2009 at 4:47 pm
Nothing is free in life. You have to pay your debts to society.
mizzhollywood26
July 14th, 2009 at 6:58 am
Consolidation is combining all your debt into one payment per month and then that one payment is distrubuted out to each of the creditors equally, and and I think settlement is a promise to pay a certain amount per month to one creditor every month until it’s paid off. And I think with settlement you can settle for a smaller amount than you owe.
Kaboom
July 16th, 2009 at 1:21 pm
Believe it or not you can do this yourself. You can call the companies that you owe money to and talk them down in the amount that you owe. I am in the finance industry, I recommend this to my clients all of the time. Sometimes you can get them to settle for as little as half of what you owe…set up payment schedules and you are good to go. This is really all that these companies do. You can save yourself the trouble of getting another party involved, they also attach them selves to your credit report….damage your credit further….this is what I recommend.
Pippi
July 20th, 2009 at 12:07 am
Debt settlement is usually a scam. Look the company up online and on the Better Business Bureau. If they aren’t listed, or if the reviews are negative, run the other way.

This site has some useful info. Careful, because you could end up owing more than the $16,000 in the end.
Gary H
July 22nd, 2009 at 11:10 am
Debt consolidation is an option, and you should look into it. Just be careful about WHAT you’re getting into. Some plans, because of their higher APR rates get you into more trouble than you were.

Also, some lenders look poorly upon it later on. Some institutions believe that it really is a black mark. It will depend upon the types of deals that your particular company or lender work out, and of course, your own individual circumstance. For some with absolutely NO way out, debt consolidation is a welcome option.

Take a good hard look at all the options and plans offered, and don’t let a single company pressure you into something you just can’t do. Make sure that you’re comfortable with the plan offered before you commit to it.

In any case, it doesn’t hurt to investigate debt consolidation as an option. It doesn’t cost you anything to find out more information about it.

If you want a place to start your investigating, there’s information and listings for debt consolidation providers on the page listed below. You’ll probably find something of use there: