What is the difference between debt settlement and debt consolidation?

Debt settlement and debt consolidation are two different methods of handling consumer debt. Both methods have advantages and disadvantages, and it is important for a borrower to understand the difference between the two in order to make an informed decision. Debt settlement is an arrangement between a borrower and a creditor in which the creditor agrees to accept a reduced amount of money that the borrower owes. This can be a good option for borrowers who are overwhelmed with their debt and cannot make the full amount of payments each month. The drawback of debt settlement is that creditors are not always willing to negotiate, and the borrower may still end up owing some of the original debt amount. Debt consolidation, on the other hand, involves combining all of a borrower’s debts into one single loan. With debt consolidation, the borrower pays the single loan each month instead of making multiple payments to different creditors. This can help borrowers save money in interest charges and make it easier to budget each month. The downside is that debt consolidation does not reduce the total amount of debt owed and may not be available to borrowers who have a poor credit score. Ultimately, the decision of whether to choose debt settlement or debt consolidation depends on a borrower’s individual situation. Those looking for alternatives to their consumer debt should also consider consulting with a Consumer Debt Defense Law lawyer in Wisconsin to discuss their legal options.

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What is the difference between debt settlement and debt consolidation?

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