These debt relief programs don’t have a negative impact on your credit but may limit your credit options for their durations.
Bankruptcy: This should be a last resort as it negatively affects your credit for many years.
When a settlement is reached, the funds you have been setting aside go toward paying your creditors and negotiation fees.
The first thing to determine is if your debt is secured or unsecured. For example, car loans and mortgages are secured debts.Debt Consolidation: Consolidation is the process of combining all your debts into a single, lower payment by taking out a loan to pay off your creditors.Companies usually attempt to lower your debt through debt settlement before recommending you take out a loan.Most often, the required collateral is a second mortgage or a home equity line of credit.This is incredibly risky because if you cannot meet your payments, your home is on the line.