Many years of easy credit and free spending have led consumers to a point where all they want to do is settle debt, and find some type of financial freedom.
Credit card accounts were easy to obtain, and most Americans found it difficult not to spend beyond their means.
A turn in the economy has meant that many consumers are stuck in debts they can no longer afford, and keeping up with payments has become almost impossible.
For the consumer looking to settle debt out and become unburdened by it, there are options available.
Debt consolidation is one of the most traditional methods.
It requires a loan to pay off all creditors, and the only debt left is the monthly loan repayment.
These loans more often than not require collateral, so they essentially become second mortgages or home equity loans.
And therein lies the problem with consolidation loans.
They take years to repay, and if the interest on them is considered, it becomes a very large amount of debt to still owe.
These loans can also be for fifteen or more years.
Debt settlement and debt management are two other ways to settle debt.
They both work similarly to debt consolidation only in one way.
The consumer ends up paying one monthly payment.
Beyond that, no loan is required and it is usual for a person to be able to settle debt in between 12 and 36 months.
These two methods work for consumers who have different circumstances, and there are requirements to become involved in the programs.
In the case of debt settlement, all principle balances with creditors are renegotiated to less amounts.
Working with a debt relief company, the consumer pays into an insured account, which is held until it is possible to settle the negotiated amounts.
It works only for those who have steady income.
Debt management works in a similar way for those who have lost a job or have little income.
Either of these methods is far superior to debt consolidation or bankruptcy because it allows the consumer to settle debt more quickly.
To truly settle debt, it means becoming debt free, and the quicker a consumer can achieve that goal, the quicker it is to begin to re-establish credit ratings and some semblance of a peaceful life.
It also means getting into better spending and money managing habits so the process can be a once in a lifetime solution.
Credit card accounts were easy to obtain, and most Americans found it difficult not to spend beyond their means.
A turn in the economy has meant that many consumers are stuck in debts they can no longer afford, and keeping up with payments has become almost impossible.
For the consumer looking to settle debt out and become unburdened by it, there are options available.
Debt consolidation is one of the most traditional methods.
It requires a loan to pay off all creditors, and the only debt left is the monthly loan repayment.
These loans more often than not require collateral, so they essentially become second mortgages or home equity loans.
And therein lies the problem with consolidation loans.
They take years to repay, and if the interest on them is considered, it becomes a very large amount of debt to still owe.
These loans can also be for fifteen or more years.
Debt settlement and debt management are two other ways to settle debt.
They both work similarly to debt consolidation only in one way.
The consumer ends up paying one monthly payment.
Beyond that, no loan is required and it is usual for a person to be able to settle debt in between 12 and 36 months.
These two methods work for consumers who have different circumstances, and there are requirements to become involved in the programs.
In the case of debt settlement, all principle balances with creditors are renegotiated to less amounts.
Working with a debt relief company, the consumer pays into an insured account, which is held until it is possible to settle the negotiated amounts.
It works only for those who have steady income.
Debt management works in a similar way for those who have lost a job or have little income.
Either of these methods is far superior to debt consolidation or bankruptcy because it allows the consumer to settle debt more quickly.
To truly settle debt, it means becoming debt free, and the quicker a consumer can achieve that goal, the quicker it is to begin to re-establish credit ratings and some semblance of a peaceful life.
It also means getting into better spending and money managing habits so the process can be a once in a lifetime solution.
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