Debt Negotiation Vs Debt Consolidation

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Many people ask us; what is the difference between debt negotiation, debt settlement, debt relief or credit card debt negotiation.
In essence, these words are very interchangeable.
They differ a great deal however from that of debt consolidation.
Debt negotiation companies deal directly with each creditor.
They take the amount you originally owe, (say $10,000 to company A), and negotiate that down to $.
20 to $.
40 cents on the dollar.
You would end up paying $3,000 to creditor A, if your account was negotiated down to $.
30 on the dollar.
If say, you had 5 credit cards owning a total of $40,000, there is a very good chance this could be negotiated down to at least half that or $20,000.
This way, you are paying off a much smaller dollar amount over a shorter period of time.
Debt consolidation, on the other hand, simply takes over the payment of your bills from you.
You make one monthly payment to the debt consolidation company, and they simply turn around and pay each of your creditor each month.
This more than likely is something that you have been doing, or trying to do yourself anyway.
There is no "debt relief" with a debt consolidation company.
They may be able to lower you interest rate a few points, however you are still paying off the entire balance owed.
Finally, a little secret they would prefer you not know about.
These companies are reimbursed by the credit card companies (usually 15 cents on the dollar) for every dollar they collect from you.
Again, if you are the typical American family who has on average 7 credit cards, and owes roughly $28,000 in unsecured credit card debt, this can be reduced to close to $14,000 through the negotiation process.
If you were able to pay say $450/month, you would be completely debt free in 31 months ($14,000 divided by $450).
If you went with a debt consolidation company, with the same $28,000 in debt and paid at the exact same rate of $450/month, at 18% interest, it would take you approximately 312 months to pay off the exact same amount of debt! So I find myself stuck in what we call "the debt trap" and I have two options to help me become completely debt free.
I can only afford $450/month.
Do I want the debt relief program that takes me 31 months to become debt free or do I take the debt consolidation plan that would take me 312 months to become debt free? For help on ways you can eliminate credit card debt call Nationwide Debt Reduction at 800-890-6658.
At least this way you have the answers to the questions you need help with.
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