How do I know if I should do debt settlement or debt mediation? Financial troubles are now facing millions of Americans due to the credit crisis. Many Americans will have to make hard decisions about their personal debt. Unfortunately there are not many great choices you can make when you are in debt. You can choose from debt consolidation, cccs, debt settlement, debt negotiation, consumer credit counseling or bankruptcy. Each choice has its advantages or disadvantages.

Is debt consolidation like doing a chapter 13 bankruptcy?

Years ago debt consolidation or consumer credit counseling programs were looked at by the credit bureaus as a chapter 13 bankruptcy. in the past if you were in a cccs program you would not be able to get a mortgage to buy a home. Now the rules for Fannie Mae and Freddie Mac have changed. You can now buy a home even though your are in a credit counseling program. Today there is more data to support that being in a debt consolidation program has no major impact in a persons ability to repay a debt than a consumer that is not in a cccs program. There is no longer any distinction that a person in a credit counseling is less likely to repay a debt vs. someone that is not in a cccs program.

Is debt settlement better than filing a chapter 13 bankruptcy?

If you are unable to make your credit card payments and a debt consolidation will not give you any financial relief, you may want to consider a credit card debt settlement program. Debt settlement is only for severe financial crisis and not just to get out of paying your bills.

Will my credit be affected by doing a negotiation settlement program?

You will have nothing on your credit report to show that you did anything. This is unlike filing a bankruptcy which will stay on your credit report for up to ten years. Typically when someone is considering a debt settlement program their credit has already been negatively impacted due to late payments or credit card accounts being in collections. In a debt settlement program you credit will improve as you pay off the unpaid collection accounts. It is a process and it may take a few months before your score will go up.

Bankruptcy should be your last option to get out of debt

If you can afford to pay of 40-60 percent of you debt balances and can commit to repayment over a four year period, debt negotiation may be an option for you. Call toll free 1-888-368-6668 for a debt review to see if debt negotiation is right for you.

Debt Negotiation is an alternative to bankruptcy

This information is of general interest. Should you require legal advice seek out a financial adviser or attorney.