How does debt management/consolodation work?
So I am thinking debt management or debt consolodation would work better then bankruptcy, but my husband did debt consolodation about 5 years ago, and we were told it looks as bad as a bankruptcy. It actually negatively effects your credit. Is this true with all the companies?
The answer is yes. Your husband is correct and it does have a negative effect on your credit. Try telling your creditors that you are trying to avoid filing for bankruptcy, which will given them nothing, and are looking to see how they can help you to work out the debt with as little impact on your credit as possible.
A debt consolidation company won’t do anything you can’t do yourself. They contact the people you owe money and negotiate a settlement. Then they pay that settlement using the money you give them. In many cases, this can have a bad effect on your credit either way, so it’s better to do it yourself.
It is just as bad as a bankruptcy, as far as credit reporting goes…
Avoid it if you can…