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Debt Consolidation and. The Debt Settlement Option: What is Better?
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Debt Consolidation and. the Debt Settlement Method: Which is the Better Option?
Debt settlement and debt consolidation both have pros and cons. The best option for you depends on your circumstances.
by Sean Pyles Senior Writer | Personal finances and credit, and personal finance Sean Pyles leads podcasting at NerdWallet as the producer and host of NerdWallet’s “Smart Money” podcast. The show “Smart Money,” Sean talks with Nerds from the NerdWallet Content team to answer questions from listeners regarding their personal finances. With a focus on thoughtful and practical money tips, Sean provides real-world guidance to help people improve in their finances. In addition to answering listeners’ financial concerns on “Smart Money” Sean also interviews guests who are not part of NerdWallet and also creates special segments on topics like the racial inequality gap and how to begin investing, and the history for student loans.
Before Sean lead podcasting at NerdWallet, he covered topics that dealt with consumer debt. His work has appeared on USA Today, The New York Times and elsewhere. When he’s not writing about personal finance, Sean can be found playing in his garden, going for runs , and taking his dog on long walks. He lives within Ocean Shores, Washington.Aug 5 2021
Edited by Kathy Hinson Lead Assigning Editor Personal finance, credit scoring, financial management and debt Kathy Hinson leads the core personal finance team at NerdWallet. Previously, she spent 18 years with The Oregonian in Portland in positions such as copy desk chief and team director of design and editing. Her previous experience includes writing copy as well as news editing for many Southern California newspapers, including the Los Angeles Times. She graduated with a bachelor’s in mass communications and journalism in the University of Iowa.
The majority or all of the products featured here are provided by our partners who compensate us. This affects the products we feature as well as the place and way the product is featured on a page. However, it does not affect our opinions. Our views are our own. Here’s a list and .
You’re trying to pay off . What is the best way to do it? as well as debt settlement?
They sound similar however they are two very different things -and each can lead to more problems for you.
It’s time to cut your debt
Register to join the link and track everything from mortgages to credit cards all in one location.Consolidation of debt
In this case, several debts are combined into a single new one. It is possible to use a balance transfer credit card, , home-equity loan and 401(k) loan.
The reason you should consider it:
To get lower interest rates than you’re paying now, which will save you money and can help you to pay off debts faster.
To cut the number of bills you’re managing
If the debt you’re trying to reduce is a manageable amount and you can type• How to pay off your debt:
Debt settlement
It is risky as you defer the payment from a creditor, and then, once your account is in serious delinquency attempt to negotiate a lower payment to satisfy the credit.
However, withholding payment can damage your credit scores and opens you to being sued for payment — and there’s no assurance that the creditor will agree to settle.
You may try hiring or trying an organization, but be cautious this field is filled with scammers. It was reported that the Federal Trade Commission recently ordered 11 companies in this category to cease their marketing, saying they took tens of millions of dollars from consumers , and provided them no benefits.
Why you might choose this option:
Try this only if you have an account that is long delinquent or in the process of being restructured, and you believe that the creditor may take a partial installment. You have little to lose since the damage is already taken care of.The author’s bio: Sean Pyles is the director of production and host for the NerdWallet’s Smart Money podcast. His work has appeared on The New York Times, USA Today and elsewhere.
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