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marc
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Subject: Debt management and debt settlement
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Fri Jan 02, 2009 11:02 am
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| Is there any difference between debt management and debt settlement? How much will I need to pay the creditor if I go through a debt consolidation program? |
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anthony
Joined: 31 Jul 2006
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Posts: 550
13573 Magic Points
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Fri Jan 02, 2009 11:24 am
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If you go for debt consolidation program, then you need to pay back the entire outstanding debt including interest and other fees and you get a five to six years time period to pay off the debt. In debt consolidation programs you pay a lower interest rate of about 10%. If you go for debt settlement programs, you get a discount on the outstanding debt amount which includes the interest and other charges.
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Anthony Marx
A positive attitude is not achieved by turning a blind eye to the negative, but rather by responding to every situation in the most positive way possible. |
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scott
Joined: 28 Jun 2006
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Posts: 462
10934 Magic Points
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Fri Jan 02, 2009 11:39 am
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I think Anthony is right. As far as I know, under debt consolidation or management plans we need to pay back over 130 to 150% of the outstanding debt amount over 5 to 6 years, while under debt settlement plans you need to pay a portion of your outstanding debt amount normally 60 to 80% of your debt. However, you will get only two to three year period under debt settlement plans to pay off the debt.
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SCOTT
Use your credit account responsibly and enjoy a debt free life. |
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sdchargers_63
Joined: 13 Aug 2007
sdchargers_63's page
Posts: 1498
111 Magic Points
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Subject: credit
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Fri Jan 02, 2009 12:11 pm
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| Do both of them ( Debt Con and Debt Settlemement) have the same 'impact' on your CR? I mean, 'less of the two evils' kind of thing? Debt Cons: 130%-150%..WOW!!....that's alot of money. |
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carol
Joined: 27 Jun 2006
carol's page
Posts: 1362
Location: Los Angeles, California
29592 Magic Points
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Sat Jan 03, 2009 6:59 am
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Both debt management and debt settlement programs will help you to improve your credit score but normally debt management or debt consolidation programs improves your credit profile more than as it would happen in case of debt settlement. This is because you pay the entire amount to the creditor plus the interest and other charges as a result of which the creditors normally agree to settle for pay for deletion agreement to recover the debt. In debt consolidation or management plans you need to pay a service charge to the debt consolidation company every month.
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Carol |
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Justin
Joined: 17 Jul 2006
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Posts: 1298
28935 Magic Points
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Sat Jan 03, 2009 7:22 am
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In case of debt consolidation program, you need to sign up with a debt consolidation company and pay a monthly service charge which you need to pay along with your monthly repayments. In debt settlement plans, you need not pay a monthly fees but make a one time payment towards the debt which includes agency fees as well as the interest payments on the debts. In debt settlement plans, your credit score improves only because the outstanding balance is reduced to zero after you pay back the settlement amount.
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All the Best 
Justin |
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sdchargers_63
Joined: 13 Aug 2007
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Posts: 1498
111 Magic Points
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Subject: credit
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Sun Jan 04, 2009 3:09 am
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| Does anyone know if CCCS has a Debt Settlement program? I know they have a Debt Consolidation program. Has anyone had experience with CCCS? |
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lincoln
Joined: 05 Jan 2009
lincoln's page
Posts: 1
28 Magic Points
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Mon Jan 05, 2009 10:07 pm
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| cccs is different than debt settlement. debt settlement usually will charge between 15%-20% for their services... but even when you include their fee, they'll be able to reduce your total debt between .40-.50 cent on the dollar. |
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fireyone
Joined: 26 Feb 2008
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Posts: 4500
8812 Magic Points
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Tue Jan 06, 2009 2:32 am
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| Lincoln, that sounds like a pretty good reduction rate. You said they charge between 15% to 29% for their services, what is this based upon? Is it the amount of the debt, the amount the debt was settled for or the amount they saved the debtor? Not really sure of how this goes. I don't know who all is aware of this but a news program suggested that if you call the original lender once you default on a debt they will not work their own debt settlement so they do not have to lose the money. Someone may want to try this. |
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carol
Joined: 27 Jun 2006
carol's page
Posts: 1362
Location: Los Angeles, California
29592 Magic Points
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Tue Jan 06, 2009 5:48 am
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Hi Chargers
As far as I know, CCCS has a debt management and credit counseling service and not debt settlement service. In credit counseling service, they they study your financial position and identify the areas from where you can cut down your expenditures and pay off the debt. If you sign up with the credit counseling company for debt management programs, they will negotiate on your behalf with the creditors to find out a repayment plan which you can afford.
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Keep in touch
Carol |
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Justin
Joined: 17 Jul 2006
Justin's page
Posts: 1298
28935 Magic Points
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Tue Jan 06, 2009 6:03 am
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Credit counseling is the first step towards your debt management. It is different from credit repair. You can repair your credit by yourself by sending debt validation and letters to remove hard inquiry, but if your debt is validated and you cannot come to a proper repayment plan to pay off the debt, then credit counseling service helps you to do so. However, you need to pay a monthly fees to the credit counseling company to manage your debt and the debt management company negotiates with your creditor for a repayment plan which will suit your income.
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All the Best
Justin |
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