What is the difference between debt settlement and debt consolidation?

Debt settlement and debt consolidation are viable options for consumers struggling with consumer debt. However, the two options differ in how they are used to address debt. Debt settlement is a process by which an individual negotiates with a creditor to reduce the amount they owe. This works best for those who have a relatively large amount of debt and are unable to make regular payments. With debt settlement, the consumer is able to reduce the amount they owe by negotiating with the creditor for a lower repayment total. Debt consolidation is when a consumer combines all of their debts into one loan. This option works best for those who are able to make regular payments, but are struggling to stay on top of multiple payments or high-interest rates. With debt consolidation, all of the debts are consolidated into one loan with an interest rate that is usually lower than the average of the individual debts. Ultimately, the option that works for each individual will depend on the debt they are facing and their ability to repay the debt. Debt settlement is usually the best option for those who have larger amounts of debt, while debt consolidation is better for those with multiple smaller debts or high-interest rates. Consumers should consult with a financial advisor or attorney skilled in Kansas consumer debt defense law to determine which option is best for them.

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What is the difference between debt settlement and debt consolidation?

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