Debt Consolidation with Bad Credit
Are you looking for debt consolidation with bad credit? If so, you're not alone. Millions of Americans look into consolidation loans every year.
But predatory lending, and undisciplined borrowers, have made debt consolidation with bad credit dangerous for many consumers. In many cases, individuals who take out debt consolidation loans, end up paying off their credit cards with the proceeds, then go right back to running up their credit cards all over again. As a result, they may end up worse off in the final analysis.
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This is one of the reasons why debt relief programs such as debt management through credit counseling or debt settlement have become more popular in recent years. Debt management can help you get out of debt by reducing your interest rates and allowing you to make a more manageable payment each month.
Debt settlement, also known as debt negotiation, may be able to help you settle your credit card debts for less than you currently owe. This involves credit card companies reviewing your financial circumstances, including your debt load, and deciding how much, if any, they will be able to forgive of your debt.
When you choose debt settlement, a professional debt negotiator may be able to help you and your lenders agree upon a single lump sum payment to settle your debt. This could save you a significant amount of money. How much is the reality? When credit card companies "sell off" what is known as "bad debt" to a collection agency, they often sell this debt off for ten cents on the dollar. Considering this fact, credit card companies may be willing to accept substantially less than the full amount of what you currently owe. How much is irresponsible to say, because each person's situation is unique in terms of how much debt they have, the type of debt they have, and the actual credit card companies that they owe the money to.
Regarding various debt relief options, many people prefer debt management to debt settlement because they want to pay back their debts in a more "honorable" way, they just need creditors to give them a break via lower interest rates or extended payment terms. Other people are so far behind and worried about bankruptcy that they are willing to explore debt settlement as a way to remove the crushing weight of credit card debt, without going through a full-scale personal bankruptcy.
Review Your Debt Relief Options
Regardless of your situation, when you review your debt relief options, make sure that you ask your debt relief specialist about the legal implications of the debt option you choose and how the debt option you are considering could affect your personal credit. This is important as is how much you can save and how quickly you could reduce or debts or become debt free.
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