New Jersey Debt Settlement Attorney
Consolidating Debt v. Settling Debt
People tend to confuse
debt settlement and debt consolidation and may even think that these two processes are the same, even though these debt resolution processes are very different. There are numerous differences between debt settlement and debt consolidation, which are outlined in detail below. If you are in need of debt relief, it is highly advised that you meet with a
New Jersey debt settlement lawyer from our firm to discuss your situation.
Debt Settlement Facts
- When people settle their debts, they will work with creditors to have the amount of their debts reduced. In some cases, people may have their debts reduced by 40 - 60%.
- After negotiations, the debtor and creditor will reach an amount that they both agree upon.
- The debtor will then pay that amount, in full, to the creditor. The debtor will only have a limited amount of time to make the full payment.
- Once payment has been received, the creditor will close the debtor's account and the settlement will appear on the person's credit report.
- Debt settlement may have an adverse effect on the debtor's credit report, but is still a good option for those who need to get out of debt fast and do not have the monetary means to make monthly payments toward their debt.
Debt Consolidation Facts
- When people consolidate their debt, they combine all sources of their debt by obtaining a consolidation loan.
- Once a consolidation loan is obtained, the person's debts will be paid and their creditors will stop calling him/her to make collections.
- The person will then have to pay off the loan with a single payment that is made each month.
- The amount of time it takes to pay off the loan will vary person-to-person. Like all loans, a debt consolidation loan will have an interest rate and if people default on their loans, they may be subjected to legal action.
- Debt consolidation is a good option for those people who want to repay their debt, but will need time to do so.
If you would like to learn more about how you can help you regain financial security, contact a New Jersey Debt Settlement Attorney at Liberty Credit Law, P.C. today!
Liberty Credit Law, PC is a law firm based in Horsham, PA with associate attorneys in multiple states where it accepts clients.