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Debt Consolidation FAQs 2

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Debt consolidating good step, but different than debt settlement - Part 2

MORE QUESTIONS ABOUT DEBT CONSOLIDATION VERSUS DEBT SETTLEMENT (Continued from Part 1)

6) What is the approval process for debt settlement versus debt consolidation? 

In both approaches, you need to be employed and serious about facing your debts. In either case, take advantage of the free online consultations available to get viewpoints from both sides. Every situation needs to be evaluated on its own merits to make sure the program is right for you.

7) What fees can be expected? 

In debt settlement, the fees vary based on the complexities of each individual situation and the actions required to resolve your particular debts. However, even with these fees, the final debt settlement should result in a final paid balance that is far less than what your currently owe. In debt consolidation, there occasionally may be a finder’s fee, or the lender may recoup their costs through an appropriate interest rate.

8) Do all creditors accept debt settlement? 

While debt consolidation allows all creditors to be paid in full through disbursement of a new loan, debt settlement means those same creditors must agree to take less than what they claim you owe them. A good debt settlement companies generally knows the which creditors are willing to work with these programs. Again a free consultation enables an experienced debt counselor to assess your unique situation and determine what your particular creditors may choose to do with an offer.

9) Can I pick and choose which debts to settle? 

Debt consolidation generally forces you to pay all your outstanding debts, then make a single monthly payment to your new lender. Debt settlement, on the other hand, allows you to choose which creditors to approach with a settlement offer. A free consultation will help determine which approach may work better.

10) Can I really expect to be debt-free at the end of the debt settlement process? 

If you remain serious about eliminating all unsecured debt, and follow all the steps, you can expect to have zero balances with the creditors you have settled. However, unlike bankruptcy, you will still owe for any secured loans (mortgages, automobile loans) and unsettled unsecured debts.

MORE QUESTIONS? SEE PART 3


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Debt Consolidation
Credit  Tip
While debt consolidation allows all creditors to be paid in full through disbursement of a new loan, debt settlement means those same creditors must agree to take less than what they claim you owe them

           

 

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