The ever growing competition in the world needs the induction of variety in every field. In order to gain competitive edge, the corporate companies introduce innovation in their businesses. Same is the case for settlement companies. They provide variety in choices available to their customers to gain edge over other firms. Free credit counseling is one of the options for getting rid of one's arrear related problems. Creditors have also obtained themselves used to the idea of setting deals with their clients who face financial problems in order to recover some money back rather than having nothing. It is also one of the reasons why settlement firms introduce options like free debt counseling or credit counseling.
When we speak of loan counseling, the person owing the money pays the amount on which the agreement is sealed. In counseling technique, the debtor has to pay all amounts of money owed but with the reduced interest rates. The broker firm in this case performs the analysis of debt to income ratio of the customer and then enlightens their customer about ways of avoiding liability accumulation.
The other option is of debt settlement. Here the situation is dependent on the financial position of the customer. The settlement firm helps the person to get the reduced payments to be made by eliminating a percentage of the balance due. But this reduction pays off in terms of negative credit history of the client. Yet we believe that every option available has its own merits and demerits.
Whether you choose the credit counseling or debt relief method depends on the customers. As one person's situation may vary from another, there the firms first analyzes what procedure will be best suited in the present scenario. If the client can manage to pay some amount off, it is better to go for the counseling method. While if the financial situation is too bad and in an unstable condition, then go for arrears arrangement.
There is another option available to end it all at once which is bankruptcy but it is not preferred by anyone unless it is unavoidable. Bankruptcy disrupts your reputation along with putting a mark on your credit report for years which is certainly desirable by none. Therefore, why choose bankruptcy when the person has other methods to pay his liabilities off.