Which is better?

Consolidation is a better choice in my opinion! Debt settlement will hurt your credit!

Neither one helps your credit, but debt settlement probably does more damage in the short run. You'll need to decide what's more important - improving your current financial situation or being able to borrow more money in the short to medium term future.

If you decide to do something about your current situation, the key thing to consider is which is better for your budget. If you are able to make minimum payments now and still keep afloat, debt consolidation is the better option. You'll end up paying about the same amount you are now, but if the consolidator is good you'll start getting ahead because interest will be reduced or even frozen. Usually, you can consolidate through a non-profit so more of the money you send does go towards your debt.

Otherwise debt settlement would be better, but you need to be disciplined and not spend the money you are supposed to be saving towards future settlements. Most people end up dropping out of settlement programs because they can't keep to this part of their programs. Also, most debt settlement companies are for-profit and take most if not all of their fees upfront before you start saving anything towards those settlements. In the long run, most of the money you put aside does go to this purpose, but it doesn't feel that way at first.

Remember, no matter what ANYONE tells you, creditors are not required to work with either type of company. They can keep calling, send your debt to collections or even take legal action. Many won't do that if you are working with a program, but if a sales rep tells you you'll never get a call, etc., hang up and call the next one. The rep is lying to you and the FTC is cracking down now on companies that promise you can't be sued or that your credit won't be hurt.

That was a perfect answer and there is nothing I can add! Thanks so much for your input! I have been strapped and can only jump in here from time to time! Please become a member here as we can use more people with your knowledge! Lots of people are losing sleep at night because of their current situations! Plus you can make a few extra bucks! What do you say!

Thanks but no thanks.