Debt settlement is an effective alternative to the complicated task of filing for bankruptcy. Many customers choose this option to get themselves out of debt without the negative impact of bankruptcy. During a debt settlement program, professional debt negotiators work with your creditors to reduce your total debt to a much lower amount.
Services generally maintain close relationships with credit card companies and other lenders. In some cases they are able to negotiate lower interest rates for their clients which will reduce debt to a certain extent.
Loans combine all of your existing payments into one new monthly payment. In some cases the overall interest rates may be reduced but you often end up with a longer payment term than you had to begin with.
Credit card companies make more money the longer you stay in debt. The minimum monthly payments they charge usually cover little more than interest charges. As a result, a $10,000 balance on a typical credit card could wind up costing thousands more to pay it off.