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Debt settlement or consolidation - What are the major differences between the two?

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what is the difference between debt consolidation and debt settlement? with settlement the credit report is ruined this true?


my personal best option was settlement i would have never been able to swing the other payment plan for 5 years. under settlement it was a guess at 2 years and i could barely pay that and sometimes they would be understanding and let me only do a half payment or something. settlement was my god send now im busy trying to restore my score. even though these stupid % hikes here lately and reducing limits have hurt me once again. I swear its a never ending vicious cycle

Sub: #21 posted on Mon, 11/02/2009 - 11:33

love_my_things love_my_things

(Posts: 1434 | Credits: )

if you would like to give your advice about credit repair, there is a section in here for just that. you would be better off to post it under the catigory repairing credit. but its in your best interest to become a member instead of a guest.

Sub: #22 posted on Sun, 11/22/2009 - 06:57

love_my_things love_my_things

(Posts: 1434 | Credits: )

Debt Settlement can be quicker; however, it will affect your credit score. With a debt consolidation program, you will improve your score over time because you're continuing to make payments under a structured plan.

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Sub: #23 posted on Thu, 11/26/2009 - 04:28


Careful People. When you make a settlement with a creditor... let's say that you are $5000.00 in the hole and they agree to accept $1500.00 as paid in full...they can report the $3500.00 balance to the IRS and they count that as income which then means you owe taxes.

Sub: #24 posted on Sat, 12/05/2009 - 19:00


If you think that your debts are becoming unbearable, try to seek professional help immediately before it makes matters much worse.

Sub: #25 posted on Sun, 12/06/2009 - 18:41

Isabelle Say Isabelle Say

(Posts: 2 | Credits: )

in deep, in fact that is true, but most people that need settlement qualify for a simple irs form while doing thier taxes that prove to be exempt to paying that debt owed to the irs. form 982. and you wont owe the irs a thing.

Sub: #26 posted on Mon, 12/07/2009 - 05:53

love_my_things love_my_things

(Posts: 1434 | Credits: )

Well, I don't know whether this is the right section to post in.However, I'm new here but I would like to say that it is a great thing you guys have going here.I simply love it!Thanks for so much information you guys have imparted.Thank you.Regards,CJ,

Sub: #27 posted on Tue, 12/08/2009 - 09:42


This is some of what the FTC has to say about debt relief:
"Turning to a business that offers help in solving debt problems may seem like a reasonable solution when your bills become unmanageable. But before you do business with any company, check it out with your state Attorney General, local consumer protection agency, and the Better Business Bureau. They can tell you if any consumer complaints are on file about the firm you???re considering doing business with. Ask your state Attorney General if the company is required to be licensed to work in your state and, if so, whether it is.
Some businesses that offer to help you with your debt problems may charge high fees and fail to follow through on the services they sell. Others may misrepresent the terms of a debt consolidation loan, failing to explain certain costs or mention that you???re signing over your home as collateral. Businesses advertising voluntary debt reorganization plans may not explain that the plan is a bankruptcy filing, tell you everything that???s involved, or help you through what can be a long and complex process.
In addition, some companies guarantee you a loan if you pay a fee in advance. The fee may range from $100 to several hundred dollars. Resist the temptation to follow up on these advance-fee loan guarantees. They may be illegal. It is true that many legitimate creditors offer extensions of credit through telemarketing and require an application or appraisal fee in advance. But legitimate creditors never guarantee that the consumer will get the loan ??? or even represent that a loan is likely. Under the federal Telemarketing Sales Rule, a seller or tele-marketer who guarantees or represents a high likelihood of your getting a loan or some other extension of credit may not ask for or accept payment until you???ve received the loan.
You should be cautious of claims from so-called credit repair clinics. Many companies appeal to consumers with poor credit histories, promising to clean up credit reports for a fee. But you already have the right to have any inaccurate information in your file corrected. And a credit repair clinic cannot have accurate information removed from your credit report, despite their promises. You also should know that federal and some state laws prohibit these companies from charging you for their services until the services are fully performed. Only time and a conscientious effort to repay your debts will improve your credit report.
If you???re thinking about getting help to stabilize your financial situation, do some homework first. Find out what services a business provides and what it costs, and don???t rely on verbal promises. Get everything in writing, and read your contracts carefully."

Sub: #28 posted on Wed, 12/23/2009 - 08:26


If i do the debt settlement program, am I going to be taxed on the reduced amount? Would it be classed as income?

Sub: #29 posted on Mon, 01/04/2010 - 20:12


How people's credit record or score gets affected on deb consolidation and debt settlement?

Sub: #30 posted on Mon, 01/04/2010 - 20:16


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