Should you consider debt counseling, debt settlement, or self-help credit report books? There are advantages and disadvantages to all of these options and the best way to decide which one would be best is to evaluate yourself and your total debt situation. By being totally and completely honest about your situation and whether you are ready to take a self directed or directed approach, you can make the best decision for you.
Your first step is to sit down and evaluate all of your current, past due, and delinquent accounts, how much percent and penalties you are paying for each, etc. Then, understand what each option entails and figure out which option is best.
Debt Counseling
Debt counseling is when you work with someone who is knowledgeable about finance (specifically budgeting and debt reduction). They may have even experienced debt problems in the past and gotten themselves out of debt. His or her expertise will give some invaluable insight on how to settle or pay down your outstanding bills with various payoff methods. This process will not erase your debt but will teach you how to budget your money so you can afford to pay off your debts over a period of time. This method is best for someone that doesn’t have much confidence in the self-directed approach and needs accountability and guidance.
Debt Settlement
Debt settlement or debt negotiation is when you or someone you hire, works with your existing creditors to settle your debt for less than you owe. This option is typically only available for individuals who are already delinquent on their payments as their creditors are more likely to settle the debts so that they can recoup some of their losses. Keep in mind that the fees collected from debt settlement attorneys can be extremely high – as much as 15%. In addition, your credit rating will likely receive a ding as a result of debt settlement. Plus, not all states allow for debt settlement, and you cannot use this option for secured debts like auto loans. This method is best for someone that doesn’t care as much about a lower credit rating but just needs help paying down debt. Although one could take the self-directed approach, it may be better to work with a professional that is versed in negotiation to receive the real benefits. If you do, just be prepared to pay extra.
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Self-Help Credit Report Books
Self-help credit report repair books are guide books purchased to teach yourself how to get out of debt. The cool thing is that there are quite a lot of self-help credit books that are available for a small one-time fee. Popular authors include Suze Orman and Dave Ramsey. In these books, they teach you step-by-step how to get out of debt. However, you will have to input the ideas and really take action if you want to get out of debt using self-help credit reports and books. This method is really good for someone who is drowning in despair, debt, and constant hounding of creditors. Someone with commitment and someone that can take action all by themselves.In conclusion, determining which method is best for you, is really a personal decision. By carefully evaluating your options and then taking immediate action – you too can get yourself out of debt, whether alone or with the help of a specialist. Good luck to you!
