Debt settlement involves negotiating with your creditors directly to try and reach a settlement agreement with them. Some creditors are willing to settle for an amount less that the total amount owed.
The disadvantage of debt settlement is that almost all settlements involve putting down a lump sum of money, and most people do not have this kind of cash sitting around. Debt settlement companies will allow you to contribute monthly until you build up enough reserves to settle a debt in full, but keep in mind that creditors do not have to stop pursuing collection and legal actions just because you have retained a settlement company - this means they can pursue lawsuits, garnishments, liens and levies while you are engaged in the debt settlement program.
Debt consolidation companies negotiate interest rates and payments with your creditors, and enable you to make one monthly payment towards paying off all your debt.
Unfortunately, with debt consolidation, creditors have the option to opt out of being consolidated, which could still leave you with multiple payments. Additionally, interest and penalties may not stop accruing, and consolidation companies may take large chunks out of your monthly payments for their own fees, resulting in a consolidated payment plan that can last more than 5 years!
Do Nothing and Ignore your Debt:
This is the bankruptcy alternative we see the most. Unfortunately, this can lead to wage garnishment, bank levies, liens, ruined credit scores, and ofcourse emotional and mental anguish. Avoid this option altogether, and contact us today to learn about the most appropriate route for you.
To learn more about bankruptcy alternatives, and the best option for you, call the Stone Haven Law Group at 877.301.7005