Debt Consolidation

Debt Consolidation - When to Consolidate and When to Get a Debt Settlement
I have known people who were of the opinion that nothing short of a settlement would help them get rid of their debts. However, they quickly changed their opinion once they negotiated with their credit card issuer. The moral is your credit card issuer need not share your enthusiasm for a settlement of the debt. If you want to settle your debts and obtain a waiver from your lenders, you will have to analyze your position and determine whether you need a consolidation or a settlement.
The first and the most important question that you should ask yourself is- how important or valuable is your credit score. If you have are very high credit score, then a settlement will affected it drastically. This will have long term consequence on your ability to get loans. A settlement is like a major surgery which ought to be done only if the ailment warrants such a drastic measure. On the other hand, consolidation is like a bandage that will help your body recover from small wounds.
If you are facing a temporary shortage of cash and want assistance to tide over the crisis, then you should not opt for debt consolidation. If you have never faced cash problems in the past and are confident of managing your finances in the future as well, then this is the best option for you.
On the other hand, if you have been playing around with different of financial tools like a consolidation, interest holiday, repayment moratorium etc and if things have not improved, then you should give serious thought to settlement.
You should consider debt settlement as the last option to be thought of before declaring bankruptcy. If your condition is so bad that a bankruptcy seems feasible in the near future, then you should quickly appoint a settlement company to negotiate with your lenders.
The choice between consolidation and settlement is not an academic one. A wrong decision will lead to severe consequences on your credit score and your financial stability. Choosing consolidation when settlement ought to be chosen may even lead to bankruptcy. Make use of the resources available on the World Wide Web to understand both these concepts before taking a final decision.