Credit Counseling vs. Debt Settlement, Which is Best?

on Credit Counseling, Debt Settlement

Credit Counseling vs. Debt Settlement, Which is Best?

Did you know Americans are in more debt now than during the 2008 financial crisis? For millions of Americans, debt has become a way of life. While some debt is positive, helping consumers invest in real estate (mortgages) or pursue higher education (student loans), high-interest credit card debts and personal loans can get consumers into financial trouble fast. Factors like unemployment, family emergencies, medical bills, and other unforeseen expenses can exacerbate existing financial hardships.

According to the Federal Reserve, the average American’s household debt exceeds $130,000, including mortgage debt, a number that has jumped 11% in the past decade. Credit card debt and car loans have exceeded the $1 trillion mark. This is largely because the cost of living has increased dramatically in recent years, but is also attributable to the rise of irresponsible spending, as consumers put items on credit that they couldn’t otherwise afford, generally living beyond their means.

If this describes your financial situation or spending habits, all hope is not lost: There are solutions – mainly through two debt relief options: Credit Counseling and Debt Settlement. These options come in the form of different ways to reduce credit card and unsecured personal loans to help you get on the road to financial freedom. 

Debt Relief in the form of Credit Counseling 

Some debt relief companies offer Credit Counseling services also known as Debt Management Programs. Certified credit counselors will help you build a feasible budget and will help you manage it month to month. Once your budget is done, you will know how much per month can be utilized to pay down your debt. The credit counselor will then negotiate and put together a payment plan with reduced interest rates that have been negotiated with the creditor. Typically, credit counseling can help you save money by reducing the interest rates to a low fixed rate, thereby getting you out of debt anywhere from 24-60 months. 

Debt Relief in the form of Debt Settlement 

Another option that a debt relief company can offer is Debt Negotiation Services also referred to as Debt Settlement or Debt Resolution programs. The goal of this service is to reduce the amount of debt that is owed by negotiating a payoff settlement for less than the balance that is owed. Some lenders may settle, or forgive, a substantial portion of your debt – even up to 50 percent of the total amount owed. While it is rare that a lender would forgive your debt in full, any portion of the debt that you can release will help you take positive strides toward financial freedom.

A Fresh Financial Start

Finding a debt relief option that works for you can give you the confidence and peace in knowing you’ve cleaned your slate and you can start anew. Debt relief may be just what you need to clear your debts and take control of your financial future. If you’re interested in learning more, you could likely benefit from engaging a credit counseling agency or a debt relief company to advise you of your options.

If you do choose to pursue debt relief options, it’s vital to know and understand your options and to be your own advocate in selecting the best path for you. At Countrywide Debt Relief, we offer more than 30 combined years of helping consumers like you find financial freedom by getting out of debt. We can be your partner and your advocate in helping you become debt free and find financial freedom. If you’d like to learn more about your debt relief options and discover how we can help you manage your debts, we invite you to contact us for a consultation.

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