Get The Lowest
Rates Today!
Complete Our No Obligation Information Application
and get Mortgage Lender's information
Five Differences Between Credit Counseling And Debt Reduction
We are frequently asked the difference between the Aegis form of debt
consolidation and that performed by Credit Counseling Agencies across
the United States. There are quite a few differences, and the following
will give you an excellent grasp of some of them. Of course, we always
recommend you contact us for a free consultation, but this information
may be helpful when deciding how you would like to beat your debt.
Difference #1: Credit Counseling Programs Require
Closing Of All Credit Accounts
With credit counseling-type programs, all major creditors require that
you close all of your credit accounts. There are exceptions, however.
These include:
Accounts
required for business purposes Accounts
with co-signers that are not applying for Credit Counseling Accounts
with minimal balances
Because creditors are given full access to your report, they reserve
the right to cancel their hardship program with you if they discover
your accounts are not closed. With Debt Reduction Settlements, however,
there are no such requirements. Usually, we recommend our clients close
some accounts, merely to "beat the temptation" that credit cards can
provide, but it is not required.
Difference #2: Four To Six Years Vs. Six To
24 Months
When enrolled in a Credit Counseling-type program, it typically takes 4 to
6 years for the average client to liquidate their debt.
Difference #3: No Savings Vs. Savings
When enrolled in a Credit Counseling Program, all debt, plus accrued interest
must be paid back.
With a Debt Reduction Settlement, the amount paid back depends on the creditors
and skill of the debt negotiator. Aegis settlements typically range from 20%
to 60% of the current debt, with the typical overall savings being 50%.
Difference #4: Your Credit Status
With Credit Counseling programs, most creditors will re-age the account once
you have made three consecutive payments through the agency. In most cases,
creditors report accounts as being paid by debt management or credit counseling. With
a Debt Reduction Settlement, current status does not changed. If you are
not current on your accounts, the report will reflect this. If you are current,
your report will state current.
Difference #5: Bargaining Power
When enrolled in a Credit Counseling Program, creditors are sent a payment
proposal, which may or may not be accepted. The proposal often requests that
all future inquiries be directed to the agency. While most creditors comply
with this request, some creditors continue to contact the debtor, especially
during the initial stages.
When seeking a Debt Reduction Settlement, all creditors are contacted immediately
to inform them of the debtor's hardship and desire to resolve their debt through
a negotiated debt settlement.
All brand names and product names used on these web pages
are trademarks, or trade names of their respective holders. May or may not be affiliated with Mortgage Lender.
NEWSLETTER 
Accounts
required for business purposes
