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Debt Resolution Help

I have questions about if Debt Resolution is right for me?

Hi, my name is Sharon and I have a few questions about what your company calls Debt Resolution. My daughter went to a Debt Relief company and the company combined all of her debts, credit cards, etc., however there was one credit card company that would not participate. Now when you do this, and your credit history is great like mine, and you ask for resolution, how do creditors look at you? Please be honest with me, because, I know that the debt relief companies get other creditors to except only a certain amount of money per month and sometimes they get the interest rate taking off. I know that that would hurt a person like myself because like I said I have excellent credit. I just have too much on me right now and my income hasn't changed. What has really happened is that I'm now having to help my single daughter with one 25 month old and another one on the way and I'm having to use my credit cards, and I'm going down, I can not save, I can hardly make the largest payment due at the end of the month. I have excellent interest rates on the cards. I do not want to do anything to mess up my credit record by getting a company to bargain with them. Please email me back and tell me if that is what really happens? Thank you, Sharon

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Bill's Answer
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Thanks for your question, and yes... there are a variety of forms of debt resolution, so you should compare all of your credit and debt solutions. Some have a big impact on your credit rating (like debt settlement, which saves you a lot of money but hurts your credit score) and others are perceived by lenders as a big negative (like credit counseling, which sounds like the program you are considering) and some have no credit impact (like a refinance loan).

If you want a free debt consultation with one of Bill's approved debt help partners, click here: Debt Relief Savings Quote

Since debt consolidation comes in many forms, it is important that each consumer reflects on what their needs and concerns and financial situation is before signing up for an online debt consolidation program. The four primary concerns for most consumers are: i) monthly payment, ii) time to debt freedom, iii) total cost, and iv) the credit rating impact of the consolidation program. Be sure to evaluate each program, relative to your prioritization of these factors.

Since there are a variety of online debt consolidation options, including credit counseling, debt negotiation/debt settlement, a debt consolidation loan, and other debt resolution options, it is important to fully understand each option and then pick the solution that is right for you.

Credit Counseling or Debt Management Plan

Credit counseling, or signing up for a debt management plan, is a very common form of online debt consolidation. Typically these programs are offered by non-profit credit counseling firms - check with the National Foundation for Credit Counseling to affirm accredidation of an individual firm ( There are many companies offering online credit counseling, which is essentially a way to make one payment directly to the credit counseling agency, which then distributes that payment to your creditors. Most times, a credit counseling agency will be able to lower your monthly payments by getting interest rate concessions from your lenders or creditors. It is important to understand that in a credit counseling program, you are still repaying 100% of your debts -- but with lower monthly payments. On average, most online credit counseling programs take around five years. While most credit counseling programs do not impact your FICO score, being enrolled in a credit counseling debt management plan DOES show up on your credit report... and, unfortunately, many lenders look at enrollment in credit counseling akin to filing for Chapter 13 Bankruptcy --  or using a third party to re-organize your debts.

Debt Settlement

Debt settlement, also called debt negotiation, is a form of online debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. Debt settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are NOT paying your creditors. This means that a debt settlement solution of online debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money.

Debt Consolidation Loan

Many people think first of a debt consolidation loan when seeking online debt consolidation. This option typically means a second home loan (or home equity line of credit) or refinancing your primary mortgage. In a debt consolidation loan, you exchange one loan for another. The most frequent form is taking out a mortgage loan, which carries a lower interest rate and is tax deductible, to pay off high interest rate credit card debt. It is important to be aware that shifting unsecured debt to secured debt can create a volatile situation, if there is ever a chance that you cannot afford the new mortgage payment you are now putting yourself at risk of foreclosure! In the case of a debt consolidation loan, most mortgages are 30 year loan, which means that the total cost and the time to debt freedom could be very high... but the monthly payment will be lower than other options and there is no credit rating impact. makes it easy to compare mortgage offers and different loan types. Please visit the loan page and find a loan that meets your needs at:

Mortgage Refinance Quote

Net-net: while there are many forms of debt resolution, many people with good to perfect credit who own homes should look into debt consolidation loans, while consumers with high credit card debt and poor credit may want to explore debt settlement or debt negotiation. However, each consumer is different, so find the online debt consolidation option that fits for you. makes it easy for you to apply for a debt consultation, by following this link: /debthelp/debt/

Depending on your income, assets, and amount of debt, one of the options I have described above may be able to help you. I encourage you to explore the website, /debthelp/ to read more about these and other options available to you.





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