What is the difference between debt settlement and debt consolidation?

Debt settlement and debt consolidation are two different approaches to managing consumer debt in Delaware. Debt settlement involves negotiating with a creditor to reduce the amount you owe them, while debt consolidation involves combining several debts into one loan with one monthly payment. When it comes to debt settlement, a consumer will negotiate with a creditor to reduce the amount due. This is done by offering a lump sum payment or by forgiving a portion of the debt. The creditor may also agree to settle for a payment plan that is smaller than the original amount. Debt consolidation, on the other hand, is when a consumer combines multiple debts into one loan with one monthly payment. This type of loan usually has a lower interest rate than each individual debt, making the monthly payment more affordable. A debt consolidation loan also has a repayment plan, so that the debt is paid off at a designated time. In conclusion, Delaware consumer debt defense law offers both debt settlement and debt consolidation as possible solutions to managing debt. Debt settlement involves negotiating with creditors to reduce the amount owed, while debt consolidation involves combining multiple debts into one loan with one monthly payment.

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What is the difference between debt settlement and debt consolidation?

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