Debt Settlement Or Debt Consolidation

Debt settlement or debt consolidation can be done individually or with the help of a third party service whose experience and relationships can help bridge the gap between debtor and creditor. These are some of the first steps that can be taken to finally finish what has been started by using credit in the first place. Not everyone has self control when it comes to credit, and some are better off left without it.

Knowing limits and being able to live within a persons means is very important in the quest for biblical living. In the Bible, Romans 13:8 says "Owe no man anything". This is very important because money is Gods test of whether or not someone is worthy of the true treasures in Heaven. The first step in choosing debt settlement or debt consolidation is deciding what future financial goals are. Should the credit cards be eliminated altogether, or should the balances just be low so that financial manageability is obtained? It is up to each individual to make up his/her own mind. For those that have no credit self control, there are many organizations that will teach and help free of charge.

Consolidation is taking out a new loan to pay off all the old debt. Now a debtor only owes a monthly payment on the new loan. The amount remains the same; the payment method just becomes more manageable. Debt settlement or debt consolidation eliminate the balance from credit cards, but consolidation allows the credit card to be used again. It is important to create a plan for the use of borrowed money. It is a privilege to use this source of funds, but needs to be used responsibly or else it may be taken away forever. Seeking wise and Godly counsel in this matter is important for continued success.

Settlement is a negotiation between debtor and creditor that allows the debtor to close out the account for a reduced balance payment that is considered payment in full. When choosing between debt settlement or debt consolidation, the status of the credit card must be taken into account. A debt settlement is better for the debtor if he/she has ceased making payments on the card altogether. This allows the debtor to pay off the card for a more affordable price. These types of loans tend to be used by those who are still making regular payments to their creditors.

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