Credit Counseling Vs Debt Settlement

The most important difference between Credit Counseling is that with credit counseling, you pay back all of the debt balances, plus interest and fees, whereas with debt settlement, you pay back only a portion of your debt. That’s why debt settlement is a much faster path to getting out of debt than Credit Counseling. This means a lot less money out of your pocket is used in the debt settlement approach. Another key difference is that your debt settlement firm works solely for you, the consumer, and receives no compensation directly from the creditors. In other words, your debt settlement firm is truly on your side. With a credit counseling agency, there is a dual relationship, where part of the credit counseling agnecy’s income comes from the client and the majority of it comes from kickbacks paid by the creditors. This creates a conflict of interest and creates doubt as to whose side the agency is really on.

Also, debt settlement provides much more flexibility than credit counseling in both the monthly budget level and the types of accounts that may be enrolled. For example, if you have a really tough month and need to skip a payment, that situation can be absorbed by a debt settlement program, whereas it will cause serious problems with a credit counseling program. Further, if your accounts have “charged off” and gone into the third-party collections cycle, you can still enroll those obligations in a debt settlement program where they will be rejected by a credit counseling agency.

Related Topics:

v      Debt Help

v      Debt Relief

v      Debt Advice

v      Debt Options

v      Debt Benefits

v      Debt Solutions

v      Debt Reduction

v      Debt Counseling

v      Debt Settlement

v      Debt Professional

v      Debt Management

v      Debt Settlement Process

v      Alternative to Bankruptcy