Compare Debt Negotiation vs Credit Counseling Learn How To Make The Best Choice For You!

You may want to compare debt negotiation vs credit counseling. When considering your options for managing your debts. The best debt negotiation technique option is the one that is right for you.

While both arrangements have the same results, there is one glaring difference. With debt negotiation, you can do it yourself.

With credit counseling, a company does it for you. Now, at first glance, one may look deceptively easy, but don’t let that fool you. Neither of these debt management options is easy.

Debt Negotiation vs Credit Counseling Which Is Right For You!

Through either of these solutions, either you, someone you appoint (like an attorney) or a credit counseling company, negotiates with your creditors to get better terms on your debts.

This may result in:

  • Lower minimum payments
  • Longer period of time to pay off the debt
  • Lowering the interest rate
  • Eliminating late fees or other fees

Reducing the balance so that you only pay a percentage

Many creditors view this debt solution as acceptable even though they may get only a portion of the money owed them. If you filed bankruptcy they would not get their money at all.

The Risks

There are risks associated with any debt management program. But compare debt negotiation vs credit counseling risks to see which you can better afford.

Debt Negotiation

With debt negotiation, if you work with an attorney you could find yourself shelling out a lot of money. Some lawyers charge $200 and some even more, for one hour or for a consultation. Additionally, they usually ask for a retainer which is 3 to 5 hours in advance.

If you do it yourself, you could find that it is quite difficult to get the best deal. This is particularly true if you are inexperienced. If you do it yourself, you may save on attorney fees and you won’t have to answer to a credit counseling company, but you probably won’t get the best payment plan either.

One of the big differences when you compare debt negotiation vs credit counseling is time and level of effort. Debt negotiation requires a lot of time and effort. You have to speak with each of your creditors and many people find the process quite stressful.

Credit Counseling

When you work with a credit counseling company, you may be required to pay a fee to the company before they will begin to tackle your debts. Also, because the company is handling your affairs, you may feel left out or uninformed because you are not directly involved in the negotiation process.

Of course, a huge risk is that you will wind up with a scam company instead of a legitimate credit counseling company. Make sure that you research the company thoroughly. Check with the National Foundation for Credit Counseling. Companies that are affiliated with this organization are legitimate and good to work with.

Benefits of Debt Negotiation and Credit Counseling

The benefits here are shared between both options. The greatest benefit, of course, is that you will see a reduction in your debts right away. You can make arrangements for a payment plan that works better with your financial situation and lifestyle.

Going this route will also help you avoid having to file for bankruptcy or doing charge-offs. Both of these options will lower your credit score rating dramatically and stick with you for up to seven years, sometimes longer. So when you compare debt negotiation vs credit counseling keep those facts in mind.

Which Option is Better?

When you compare debt negotiation vs credit counseling the better option is the one that is right for you. If you have a lot of debts, create a budget to see how much you have to put towards your debt and just how out of hand your debts really is.

Then visit a financial adviser or credit counselor and create a plan that will help you get rid of your debt and get your financial situation back on track.

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