Are there any debt consolidation companies that do bulk settlements that clear your credit quickly?
I want to work with a debt consolidation company that pays off the debt on your credit report quickly and have you pay them monthly. I do not want a consolidation company that only pays the collectors as you pay them.
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There is a lot of confusion as to the difference between "debt consolidation", "debt settlement", and "debt management". It sounds like you are looking for a hybrid of debt management and debt settlement which I don’t believe exists. In order to accomplish what you are looking for you may be best off just consulting with a non-profit consumer counselor and then handling your situation on your own. Here are the 3 most typical alternatives for bankruptcy:
1) Debt Consolidation. This is an option where you take all of your debts and combine them into one loan with a lower interest rate. This option has it’s advantages as well as disadvantages. The advantage is that doing this will typically not hurt your credit and if disciplined, allow you to pay off your debt sooner. The disadvantages are that i) many of us are not discipline enough and often just go out and borrow more compounding the problem, and ii) often the consolidation loan is secured against your home. This means that you will most likely convert unsecured debt (ie credit cards, medical bills, etc) that is more easily discharged through bankruptcy or settled through debt settlement into secured debt that puts your personal home at risk if you default.
2) Debt Management Plan (Credit Counseling). Debt Management typically involves a third-party company (usually non-profit) negotiating a lower interest rate and/or longer payment term on your debt. This helps you to lower your monthly payment. The company is paid by your creditors directly for their services. The advantages to this option is that you are able to pay off your debt without excessive creditor harassment or without the risk of getting sued for non-payment of debt. The disadvantage is that it will typically take longer to pay your debts off, hurt your credit score, if you miss a payment the creditors often have the right to revert back to the old terms of the agreement and the company helping you often is beholden to their boss – your creditors.
3) Debt Settlement. Debt Settlement involves you (or a third-party company you hire) settling your debt for an amount 40-60% less than what you owe. With Debt Settlement, you stop paying your creditors and begin setting aside funds in a settlement account you own to settle with creditors. As the account grows, creditors will be settled one by one. The advantages to debt settlement are that you typically pay off your debt in a shorter amount of time and pay less than your initial principal. You also maintain control of your settlement since funds are placed into a settlement account owned by you rather than sending them to your creditors. The disadvantages are that it will hurt your credit (since creditors typically will not settle until you are at least 6 months late), that you will have to deal with creditors’ collection practices, and, if you hire a company to help you, you will have to pay that company anywhere from 10-20% of your debt amount.
You would be best off consulting with your attorney as to your situation, exploring your options, and then making a decision based on that.