Perhaps you’re unable to sleep at night, or you’ve got a sick feeling in the pit of your stomach – all because of accumulated debt, interest and late fees owed to your creditors. If this is indeed the case it’s time to find a solution to put an end to the uneasiness you’re experiencing due to your finances.

You’ve probably scoured the Internet and various other sources of information looking for a solution, and have heard about debt settlement as a possible solution to your current financial predicament. As you very well may know, this type of debt relief has many critics, and the available information regarding debt settlement is extremely confusing, as well as misleading.

Obviously, one of the main factors and/or concerns people seriously contemplate when considering debt settlement is the affect it may have on their credit score. Debt settlement can have a negative impact on your credit score if you should decide to go this route toward debt relief while your various credit card accounts are still “current.” If, however, your accounts have entered a stage of delinquency, the only direction your credit score can go is up, and the end result will be the reflection of zero balances on your credit report and, subsequently an increased credit score.

Perhaps your accounts are all current, and you’re considering debt settlement because you’re struggling each month to make ends meet. Worse yet, you may find yourself borrowing from one creditor to pay another. If this is a scenario to which you can easily relate, you may want to reconsider just how significant your credit score really is – or should be.

Having an acceptable credit score brings peace of mind to many people, but if you’re buried in debt that peace of mind is erased by sleepless nights trying to figure out how you’ll be paying your monthly bills. While it is a requirement of creditors to only settle those accounts that are delinquent, please keep in mind that your delinquency is only temporary, and oftentimes so is the reduced credit score you may be facing.

So, if you believe that you can trade what may be considered a decent credit score for financial stability and a temporary less-than-perfect credit score, debt settlement may be an option worth looking into. If you’d like to learn more about the process of debt settlement, click here.

One popular way people deal with medical debt is through consolidation. If you are struggling, medical debt consolidation is one way to attack it but it does have its downsides. Consolidation comes through either a financial institution loan or through the use of a debt management company. Like any other debt consolidation method, there are pluses and minuses – costs and benefits which you need to understand.

Consolidation Through A Loan

One type of medical consolidation is achieved through the use of a bank loan. The loan can be secured or have collateral behind it – in which that collateral could be your house or other assets you have. A secured loan is a much better loan than an unsecured loan. An unsecured loan is a loan in which the bank has no collateral in case you fail to repay. Therefore, a secured loan (refinance, home equity, loan against your 401k etc) usually carriers a much better interest rate. In both cases, your credit score is a huge factor. The lower your credit score, the more likely you are to obtain a higher interest rate. Taking out a loan is only advisable if the interest rate you can obtain on the loan is lower than your medical debt interest rate, it prevents your credit score from being degraded, and or of it prevents you from filing for bankruptcy.

A debt consolidation loan is not beneficial if it is at a higher interest rate than your current medical debt interest rate. However, it can be beneficial in lowering your monthly payments so they are more manageable. However, realize a loan usually results in your paying more principal in the long run because your payments are lower. This type of consolidation can be difficult to obtain although usually a secured loan is much easier to obtain then a non-secured loan.

Consolidation Through Debt Relief Company

Another way to consolidate your medical debt debt is by signing up with a Credit Counseling or Debt Relief Company. These companies can negotiate with your creditors (hospital, doctor’s office, or collection agency) to potentially settle for a lower amount and set you up with reasonable payment plans or payment plan you can afford. If you are the type of person that feels better with assistance then sign up for a “Medical Debt Consultation” at the top to see if you qualify. However, you can also contact your creditors yourself and negotiate yourself (interest rates and payment plan). Make sure when you pursue assistance, that you ensure your credit score will not be negatively affected. You want to reduce your interest rate (if any) and balance but with reporting to the credit bureau as “paid in full” or “paid as agreed” instead of “settled.” In other words, talk to your credit counseling or debt management company that you want options that don’t require your credit being degraded any further.

In summary, debt consolidation, when it matches your needs, can be a viable option for medical debt. Always compare your interest rate with a bank loan, and if you are unable to obtain a loan work with a credit counselor or debt management company. Always consider the consequences and benefits no matter what you do. Moreover, ask questions in whatever consolidation method you select.

To determine the viability of a company can be a lengthy and complex process. A quick way to narrow down the selection process would be to evaluate the financial strength of the company and the effectiveness of its management team.

Financial ratio consisting of current ratio, debt-equity ratio, price-earning ratio (PER) and return on equity (ROE) is one quick way to check the status of a company.

Current Ratio

Current Ratio is an indicator of the company’s debt-paying ability over the short term (12 months or less). It’s determined by dividing the current assets by the current liabilities. If the outcome is between 1 and 2.5, the company’s financial situation can be considered as healthy. Even tough, the higher the ratio, the more liquid the company, however, anything over 2.5 would indicate that the company may be keeping too much cash and may not be investing enough to provide future growth.

It’s probably also useful at this point to calculate the interest coverage ratio, which will indicate the company’s ability to service its debt. Interest coverage ratio is income before interest and tax divided by the interest expense. The greater coverage, the better it is.

Debt-To-Equity Ratio

Debt-To-Equity Ratio is an indicator of a company’s long term financial leverage. It compares the assets provided by the creditors with the assets provided by the shareholders of the company and is determined by dividing the long term debt by the shareholder’s equity.

The track record of the management team can be determined by using the following ratios:

Price-Earnings-Ratio (PER)

The Price-Earnings-Ratio is the relationship between the market price of the company’s shares and the earnings per share (EPS). This ratio tells you what you would be paying for each dollar of earnings. To work out the PER; divide the share price by the EPS. Generally, a high PER would means high projected earnings in the future. However the PER actually doesn’t tell us a whole lot by itself. It’s useful to compare the PER of companies in the same industry, or to the market in general, or against the company’s own historical PER.

As earnings tend to fluctuate from year to year, consider using the average earnings over the last six to ten years rather than for a particular year. It’s more valuable to look at the PER over time in order to determine the trend.

Return On Equity (ROE)

The Return On Equity encompasses the three main areas where investors can assess the company’s profitability, asset management and financial leverage. ROE represents the management’s ability to balance these three pillars of corporate management and investors will get a feel of whether they’ll receive a reasonable return on equity and assess the management’s ability to perform.

ROE is determined by dividing net income by shareholders’ equity. Net income is the last item listed on the income statement while shareholders’ equity (the difference between total assets and total liabilities which is located in the balance sheet).

By working out these ratios, investors are able to form an evaluation of a company’s financial strength, its management and employees. However, these ratios should only be used as a guide only. They should also be viewed in conjunction with each individual’s objective.

For instance, if you were a value investor, you would consider a company with a PER of 30 to be too expensive. However, if you were going for growth, you would consider the company to be viable investment if it had an ROE of over 25 and its earnings were still growing rapidly.