Debt Counseling Services

Debt Reduction - Debt Settlement

The purpose of debt settlement and debt reduction is to become debt free, but how these programs are fulfilled and function completely different.



Theres a huge difference between debt reduction programs and debt settlement. To start, debt reduction can very well be achieved without assistance. Debt reduction is most helpful for people with $1,500 - $5,000 in debt that don't want to fall deeper in debt, and continue paying high revolving interest rates. Whereas debt settlement is typically for consumers ranging anywhere from $5,000 - $500,000 in unsecured debt.

Debt settlement, on the other hand aims to satisfy your creditors for less than what they claim you owe and two save you as much money as possible during the duration of the program.

Many people choose debt settlement programs because their debt levels have exceeded a manageable amount to payback in full and they want to avoid bankruptcy if at all possible.

A number of our clients have also expressed another reason for their prompt decision to forgo debt settlement; they're upset and disturbed with the credit card company over the fact that their interest rate has increased to an unfair high rate like 25 - 30% and the company refuses to lower it no matter how much you plead.

Overall, most Americans choose debt settlement over their desire to have closure on being in debt and their priority of becoming debt free becomes their number one goal and it outweighs any real or perceived thought of any negative impact that it could have on their credit history while going through the process of debt settlement.

Debt settlement can lead to a very bright and fulfilling ending if fully completed, so it's important to stay in the debt settlement program from start to finish.

Quick Tips: Don't confuse debt reduction with debt settlement, they are completely different. If a company wants to charge your credit card before enrolling you - run. The purpose of debt settlement is to get out of debt by paying off your credit cards for a less than owed amount. So charging your credit card would defeat the purpose, call a real company that doesn't charge your credit card to help.

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