Q:
I am considering some type of debt program to help eliminate credit card debt. I’ve had discussions with a company that does debt settlement and another company that does debt management. What are the pros/cons, short term and long term impacts of each program – specifically credit score impacts. I need an unbiased answer. I have a significant amount of debt but I am current on my payments. The reason for doing a program is to be able to pay off my debt in this lifetime. Any advice?
Alicia
A:
Hi Alicia,
We just posted a article on the web about this particular subject. You can reference it here. In our professional opinion you are better off calling the creditors yourself and working out arrangement’s. If you find you can never get caught up, you might consider Chapter 13, there really is no difference in the eyes of lenders. When it comes to credit, that is all you are really worried about anyways. Your credit scores will be affected either way, unless you can work something out with your credit card companies. Make sure if you work some type of arrangement out with them, that they dont report any late payments on your behalf. Also get everything in writing.
* note: Debt Settlement or Debt Management will report on your credit report as Debt Consolidation typically. You are better off filing Chapter 13 , and paying a attorney there fee, instead of paying a bunch of unnecessary money to a debt management company.
Hope this helps.
CreditScoreQuick.com
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Good article and wise tips on how to avoid redit card debt. Some people find it difficult to get out of a debt and begin to look for additional financial help. So, think twice before to do something.