If you are looking for ways to settle your debts then this article is the right for you. This article will talk about the best method to settle your debt problem. Subsequently, we will differentiate debt negotiation from debt consolidation, benefits offered by debt negotiation services, and advantages and disadvantages of debt negotiation. After reading this article, you should be able to know why debt negotiation is the best way to resolve your debt problem.

Debt consolidation is a process of using a company and combines all the money you owe on all of your credit cards into one amount then they will pay these bills on your behalf. You in return pay this company with the agreed monthly payment until the debt is paid off. This payment is lower than what the credit card companies offer you, saves you money every month and is often one of the best way to consolidate debt. On the other hand, debt negotiation is sometimes referred to as debt settlement. It is an agreement between your creditors that you will pay only a percentage of your balance and consider you as fully paid for your debt. This is most often offered to people who can't handle a debt consolidation program.

Debt negotiation companies have certain steps to follow in order to help anybody who enters the program become debt free in shortest amount of time possible. They will first talk directly to your creditors to help lower your monthly installments of your current debt in order to lighten the load. Then they will have an agreement with the creditors about the new terms and payment plans according to what suits you best. They will be the one to pay your creditors once you pay your monthly payment with them.

One advantage of debt negotiation program is you stop paying directly to your creditors. Another is this method is shorter compared to debt consolidation. It is easier for a person to keep track on his payments since only one payment should be tracked. On the other side, here are some disadvantages of using debt negotiation. It lowers your credit score while you are in the program. However, most debt negotiation companies require the creditor make the credit report show paid in full so it doesn't show up as a negative on your report once your account is settled.

Now that you have an idea what debt consolidation compared to debt negotiation is; choose which one will work best for solving debt and credit problems for you. Just note that, debt negotiation companies are resources that should only be used as a last resort; and only when you are sure that there are no other ways out to solve your debt problem.