Once you know what your goals and your options for paying your debts need to know what the best option for you.

It is very important to understand the difference between:

1. Debt consolidation.
2. Debt Negotiation.

The consolidation and debt negotiation have their advantages and disadvantages. To see the advantages of debt consolidation and click here to see the benefits of debt negotiation click here.

Compared to debt consolidation, negotiation may seem advantageous, since it actually negotiate with creditors to avoid having to pay part of the money you had paid and cancel it as bad debt.

Pepe Imagine a bank borrowed € 1000. When the bank asks you back Pepe Pepe money tells the bank to 400 € if you will forgive the remaining € 600. Sometimes creditors accept these agreements can cost as much effort and sometimes money to recover the remaining € 600.

Although this may seem like a dream come true, has many drawbacks associated:

1. Is displayed on your financial history you took out a negotiation and you came to an agreement that did not pay all your debt.
2. Although it is a better option than having a debt in your history, is very harmful for you, as any future creditors will see that you have not paid the full amount of your debt in the past.

When should you choose to consolidate your debt and when to negotiate?

1. If you have outstanding debts to more than one creditor for you debt consolidation.
2. If you think you have too much debt, there is no way you can afford them and that can go into bankruptcy, then debt negotiation is the right solution for you.