Debt Settlement Vs. Debt Consolidation Which Option Is Better?
Both debt settlement and debt consolidation can reduce and eliminate your debt. But each will have different consequences on your credit score and future financial options. Before choosing either option, educate yourself on the pros and cons of each.
The Benefits Of Debt Settlement
Debt settlement means that part of your debt is immediately wiped out by your creditor. You will find instant financial relief in your monthly budget. And the rest of your debt payments are much more manageable.
You will also find that you can start rebuilding your credit from this point on. Instead of juggling late payments, high debt loads, and other factors, you can focus on managing your credit better.
The Downside Of Debt Settlement
There are a few downside to debt settlement. The biggest one is the immediate affect on your credit score. Debt settlement is seen much like a foreclosure; your score will be 500 or lower. And while you can improve your score, for the next two years you will have to work with sub prime lenders.
You will also have to deal with the tax implication of a write...