Debt Consolidation And Settlement – Cooling The Flames Of Your Own Private Financial Hell

For those perishing in the flames of overwhelming debt, debt consolidation settlement can be a form of financial salvation.  There are many programs available that allege to help reduce or eliminate debt, but almost all require a payment as large as the combined payments you are already paying; the help that is offered is, in fact, no help at all. Ultimately, there are only two programs that will truly reduce your debt burden; those are Chapter 7 bankruptcy and debt consolidation settlement.  Debt settlement and consolidation is an alternative to bankruptcy that will give most of the benefits, with fewer drawbacks.  

Debt settlement isn’t really meant for those who can pay their bills without robbing the children’s college fund, or milk money for that matter. Rather, for those whose expenses are greater than their income, who are sliding deeper into their own personal financial hell every month, it can be the beginning of a new era of financial freedom.  The advantage debt settlement has over other forms of debt management programs is really quite simple: None of the other programs reduce your principle. Debt settlement and consolidation, on the other hand, reduces your principle by about 60% on average.  

Another advantage debt settlement holds is the inherent flexibility of the program. Rather than being locked into a payment you can’t afford every month, along with the stress of knowing that if a financial emergency hits, you’re basically hosed, you’ll have the peace of mind of knowing that each month, you are setting aside an amount you can afford. If you have good months, you can save more; if you have bad months, you can skip the deposit. The point is, you have up to 3 years to save enough in a separate account to negotiate a settlement of your debt with each individual creditor.  

Debt settlement does have its downsides and risks. But since your monthly payment is going into a separate fund used only to settle with your creditors, and that you control, then one bad month simply means you deposit less that month. Depending on your resources, if you can make up for it in a later month, then you should do so, but if you can’t, it really isn’t a big deal. Once you have saved enough to settle your first account, typically 35% to 50% of the amount owed, you make an offer, then begin saving towards settling with the next creditor, and so on right down the line. Most creditors will take the deal, but you will almost always do better if you have hired a professional to negotiate the settlements on your behalf.  

The greatest thing about debt consolidation settlement is that it is the only debt reduction plan that observes a quite simple truth: The pace of your debt elimination should be defined by your budget, rather than your budget being dominated by your debt burden. The weakness of all other programs is that the debt, rather than the budget, still comes first. Debt settlement puts you, not your creditors, in the drivers seat. While it won’t solve all of your debt problems, it will certainly go a long way in delivering you from the hell of debt into the promised land of credit freedom.

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