Major Differences Between Debt Settlement And Consolidation

Aug 31, 2015 | Finance

If you are struggling with credit card debt, it is highly likely that you have or will consider speaking with a debt relief professional to help you get out of debt. Debt Settlement and Debt Consolidation are frequently used debt relief programs that are designed to help people get out of debt. More often than not, people confuse Debt Consolidation with Debt Settlement and vice versa. In terms of similarities, they are both debt relief programs but in reality, are very much different. Here are the major differences between Debt Settlement and Debt Consolidation.

  • Debt Consolidation involves obtaining a new loan to consolidate other loan(s) into one new loan and payment.
  • Debt Consolidation terms are often times based on your credit and other compensating factors. Credit and income could impact your loan terms meaning higher interest rates for individuals with fair to poor credit.
  • Debt Consolidation does not reduce the amount of money you owe to your lenders or creditors. You are simply obtaining new loan terms and paying on the same amount of money you previously owed plus interest and any associated costs with the consolidation program.
  • Debt Settlement does not involve taking out any new loans or obtaining new credit
  • Debt Settlement qualification is not based on credit, income or other traditional factors. It is merely based on your ability to pay, your hardship and your specific information.
  • Debt Settlement’s goal is to negotiate with your creditors to pay back a reduced amount of debt.
  • Debt Settlement can get you out of debt in a typically shorter period of time than other debt relief options.

As you can see, Consolidation and Settlement are very much different and both are effective debt relief options for the right individuals. Consumers should understand and explore all debt relief options before making a decision to move forward with one. Brownstone Law Group offers a completely free, private consultation where you can learn about all of your debt relief options. Call us today at (888) 853-8871 or visit our website at to learn more about Debt Settlement and how it may benefit you.

This article has been reviewed and approved by Thomas A. Moore, managing attorney Brownstone Law Group, PC. California Bar # 148698. This article is for informational purposes only, does not provide legal or tax advice of any kind or form any type of attorney/client relationship. This article was published on August 31, 2015


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The information contained on this website is not to be construed as legal advice. It is not intended to solicit or form an attorney-client relationship. Debt settlement, debt negotiation or debt resolution programs (the “Program”) are not an offer or promise to lend money and neither they nor Brownstone Law Group, PC. (“BLG”) assume or pay any consumer debt or make monthly payments. BLG is not affiliated with any lending institution, bank, collection agency or collection law firm. Individual Program results may vary and are based on but not limited to the ability of clients to save funds and successfully complete their Program terms and conditions, the amount and type of debts and creditors, history of accounts and financial standing of clients. Past performances of Clients do not guarantee future results for others and BLG does not guarantee that debts enrolled in the Program will be settled at a specific percentage or amount, or that you will be debt free within a specific time period. Not all Clients complete our Program for a variety of reasons including but not limited to an inability to save sufficient funds. The Program may have an adverse impact on Clients credit. Our services may not be available in all states please check with BLG for state eligibility. Please contact a tax professional to discuss potential tax consequences of settling debt. This website and the content of this website has been reviewed and approved by Thomas A. Moore the managing partner of BLG who’s mailing address is PO Box 629, Orange CA 92856-6629. Copyright Brownstone Law Group, PC. All rights reserved. Unauthorized use of the BLG website includes but is not limited to content copying, duplicating or replicating is strictly prohibited. Furthermore, use of this website is subject to the Terms of use.

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