Debt settlement and debt consolidation programs provide more efficient methods for consumers to handle debts than bankruptcy. Consumers who face money problems and who consider bankruptcy should seek either debt consolidation or debt settlement to reorganize their finances.

Debt consolidation involves consumers obtaining a loan and using the proceeds to pay off all high-interest debts. This method allows consumers to reduce interest costs and make payments to only one creditor.
Debt settlement programs, in comparison, help consumers with debt problems by negotiating with creditors to reduce the total principal debt. Consumers repay a portion of the total debt, but creditors accept the partial payment to settle and close out the outstanding account. Debtors can regain control of their financial situation with debt settlement programs by saving money to repay their debts, and help them avoid bankruptcy.
Creditors are more willing to negotiate with debt settlement companies because they recover funds that would otherwise be lost if consumers filed for bankruptcy. The creditor only receives a portion of the debt – usually much of the original principal - but they accept a portion rather than the possibility of nothing at all through bankruptcy.
Bankruptcy damages a consumer’s credit record for at least seven to 10 years, but the stigma remains on their credit history for life. The alternatives provide consumers with the means to rebuild their history and improve their credit score. Debt consolidation allows consumers to repair their credit record through timely repayments. Debt settlement allows consumers to improve their poor credit rating immediately after completing the settlement program.
Debt problems can engulf consumers, but they can eliminate these problems while avoiding bankruptcy, with either a debt consolidation loan or a debt settlement program. Both methods provide consumers better alternatives to handling debt and improving their future finances than bankruptcy.


Are You Paying Too Much For Your Loan Insurance?
When you take out a loan, it is likely that you will be offered loan insurance to protect your payments should you be unable to keep up with them due to illness or unemployment. However, many of the loan insurance policies on offer cover you for very little and are extremely expensive. If you want to find out what you should be paying for loan insurance and what to avoid then this article can help you to decide.
What is loan insurance?
Loan insurance is often known as payment protection insurance or PPI. This type of insurance covers you if you cannot make your loan payments because of an accident, illness or involuntary unemployment.
How much does it cost?
The price of loan insurance can vary greatly, but is usually added as an extra to your payments each month. Although the payment figure might look small, if you add it to the total loan amount and then add interest the number can seem much more.
Hidden costs
Although a loan might seem cheap, when payment protection is added the loan price can increase significantly. For instance, the amount you pay back on a £5000 loan over 5 years can increase by over £1,500 when loan insurance is added. Often, loan insurance is added without you knowing about it, which means you are paying for something you didn’t even ask for.
The benefits
Despite its high cost, there are some benefits to loan insurance. It can give you the peace of mind that if something should happen to you then your payments are covered for up to a year. This means that you won’t be in financial difficulty or risk default if you are ill or injured. If this sort of security is important to you then loan insurance is probably a good idea.
Lack of cover
Although it can give you peace of mind that you will be covered, loan insurance has extremely limited coverage. For example, if you are self employed it is unlikely that the unemployment clauses will cover you unless your business has ceased trading. Before getting any loan insurance you should check that you are covered for the things that are important to you, otherwise the policy is not worthwhile.
Alternatives
There are some alternatives to loan insurance that are usually cheaper. Firstly, you can usually get the same sort of loan insurance cover independently from your loan provider. The price of this insurance is usually much lower than the price offered by your insurance company. Also, some of the clauses of the loan insurance may already be covered under other insurance policies that you have. Loan insurance can be worthwhile, but unless you are covered and can get the insurance for a good price then it is usually not worth having. However, if you shop around and know exactly what you need to be covered for, you can find insurance that will cover you in the event that you cannot keep up with your loan repayments.

Peter Kenny is a writer for The Thrifty Scot, please visit us at Car Insurance and Loan Protection
Visit http://www.thriftyscot.co.uk


Debt Consolidation or Debt Settlement Rather than Bankruptcy
Debt settlement and debt consolidation programs provide more efficient methods for consumers to handle debts than bankruptcy. Consumers who face money problems and who consider bankruptcy should seek either debt consolidation or debt settlement to reorganize their finances.

Debt consolidation involves consumers obtaining a loan and using the proceeds to pay off all high-interest debts. This method allows consumers to reduce interest costs and make payments to only one creditor.
Debt settlement programs, in comparison, help consumers with debt problems by negotiating with creditors to reduce the total principal debt. Consumers repay a portion of the total debt, but creditors accept the partial payment to settle and close out the outstanding account. Debtors can regain control of their financial situation with debt settlement programs by saving money to repay their debts, and help them avoid bankruptcy.
Creditors are more willing to negotiate with debt settlement companies because they recover funds that would otherwise be lost if consumers filed for bankruptcy. The creditor only receives a portion of the debt – usually much of the original principal - but they accept a portion rather than the possibility of nothing at all through bankruptcy.
Bankruptcy damages a consumer’s credit record for at least seven to 10 years, but the stigma remains on their credit history for life. The alternatives provide consumers with the means to rebuild their history and improve their credit score. Debt consolidation allows consumers to repair their credit record through timely repayments. Debt settlement allows consumers to improve their poor credit rating immediately after completing the settlement program.
Debt problems can engulf consumers, but they can eliminate these problems while avoiding bankruptcy, with either a debt consolidation loan or a debt settlement program. Both methods provide consumers better alternatives to handling debt and improving their future finances than bankruptcy.