The difference between debt consolidation and debt settlement.
Debt consolidation and debt settlement are both forms of debt relief, however, they are very different methods.
Debt consolidation reduces the number of creditors owed. This is done by getting a debt consolidation or personal loan or a 0% balance transfer card. Your old debt gets paid off with the new loan and then you make a single payment each month towards the new loan debt. If you can get a lower interest rate on the new loan, it may be a good option for some.
Debt settlement is negotiating lower balance amounts to pay your creditors. To do this, you have to stop making your payments until they are charged off and enough time has gone by that your creditors are willing to settle for less than the full amount. This is extremely damaging to credit scores and we do not suggest this route in most cases.