Understanding The Differences Between Debt Settlement And Debt Consolidation

By Author: David.Green
Total Articles: 20
Comment this article

Thousands of Americans today find themselves in dire straits when it comes to credit card debt. Naturally, during past economic downturns, many Americans relied on credit cards as an immediate solution to the financial crisis. However, as interest rates soared to an unprecedented high, the amount of money that they owed their creditors rose proportionately.
If you are struggling with a similar situation and have over $10,000 in unsecured debt, it is time to seek professional debt relief assistance. Two popular programs that serve as excellent alternatives to bankruptcy are Debt Settlement and Debt Consolidation. Choosing a program that offers the greatest debt relief for your particular financial situation begins with understanding the difference between Debt Settlement and Debt Consolidation.
Debt Settlement
Debt settlement is the actual practice of debt elimination. A debt settlement company will negotiate with your creditors to reduce the amount that you owe. When you enroll in a debt settlement program, you will sign a power of attorney authorizing the debt settlement company to negotiate with your creditors ...
... on your behalf.
You will then make monthly deposits into a savings account until it has accrued a substantial lump sum. The settlement company will then pay your creditors from this settlement account with the newly negotiated terms. Debt settlement programs have proven to provide excellent debt relief for many Americans because legitimate debt settlement companies can eliminate up to 50% of the debt you owe.
Debt Consolidation
Similar to debt settlement, debt consolidation also reduces your monthly payment and eliminates debt quickly. However instead of eliminating a percentage of the debt you owe, your multiple debts are combined into one large loan. By taking out a loan to cover all other debts owed, you only have to make payments to one debt.
Although the amount you owe is not reduced, you can still save money by negotiating a lower interest rate. Like debt settlement, the convenience of making one payment instead of multiple payments also simplifies your budget and makes it easier for you to track your spending.
Rebuilding Your Financial Health
The road to rebuilding your financial health and get the debt relief you seek begins with an initial consultation with a qualified debt settlement company with a proven track record. Most debt settlement companies offer a free consultation with a debt arbitrator, who outlines your options and advises you on the best debt relief program for your particular circumstances. A qualified debt settlement company also provides you with the tools and resources you need to create a realistic budget and develop a savings plan.
Located north of Dallas, Greenshield Financial Services is a qualified debt settlement company with certified debt arbitrators who follow the highest standard of professional conduct as designated by the International Association of Professional Debt Arbitrators (IAPDA). Greenshield's mission is to guide clients toward a debt-free life by helping relieve concerns, resolve debt, and rebuild strong financial health, both now and in the future. Part of the company's world-class customer service includes providing financial education and savings guidelines for consumers to deploy immediately and in the future, when professional debt settlement is no longer needed. Visit www.greenshieldfs.com today to schedule your free consultation.

Heather Preston debt relief - Green Shield Financial Services is a Financial Health Management Company that specializes in a debt settlement program as alternatives to debt relief, debt help, and bankruptcy to help you learn how to get out of debt.