Debt Settlement vs Consolidation

Debt settlement and debt consolidation are debt-reduction strategies

Excellent

Based on 376 reviews.
Overall 4.4 out of 5 stars

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Annette Huggins

March 14

That when it seems like nobody can help United will.

This was a great experience for me. I am just starting but Madelene Gallon made me feel like we were friends for years. She tried to make me feel that she would help me and make sure I got the best deal...

Kiirstin

March 01

Kind and caring

Had been searching for a while for a company I could trust to get me out of crippling debt. Really didn’t think it was possible. Spoke to Ben at United Debt and he assured me that not only was it possible,...

Kiirstin

March 01

Kind and caring

Had been searching for a while for a company I could trust to get me out of crippling debt. Really didn’t think it was possible. Spoke to Ben at United Debt and he assured me that not only was it possible,...

Dylan

February 28

Quick, easy assistance!

I've been working with Ben at United Debt to help me organize and get out of debt for once - I've been dealing with debt for ages and Ben showed me some simple ways to begin dealing with things to keep...

Takota Carrie

February 14

I need help

I really appreciate

JONICA Amber PIRON

December 21

Great!

Renika went above and beyond today to help me. She is wonderful to work with! Thank you again Renika for all of your help today! Happy Holidays to you!

Jayvon

December 20

Paying back

They where great listeners

Shawn abetha

December 14

Everything

Thanks

Dm

November 18

Customer service is truly helpful

Renika was so helpful. My account was paid off but I kept receiving notifications. She cleared up the situation.

Jose Rosa

November 16

Great Customer Service

Renika did a wonderful job handling my questions and transactions. She is very patient on the phone and took care of my needs accordingly.

Russ

November 03

Very helpful

Renika did a great job in answering all of my questions in a timely manner. She was polite and friendly. Keep her on the payroll.

Anthony Desoto

October 31

What's Important to me is United Settlement Costumer service !

United Settlement Costumer service is Amazing Everyone is Professional . I am so happy choosing them with my card Debt. thank you all for helping me out .

Ri cky

August 23

That this company has integrity!

A responsive company that keeps it clients up to date and fully informed. I like the fact that I can send them a text and be guaranteed an answer within 24 hrs.

Jerry Bolandis

June 04

Professional and focused on facts and truth not hype. Excellent. We want to know facts.

Great work very professional and great updates. Communication is excellent.

janice head

October 25

trust them

Excellent. Also each time i call there they treat me with respect even though they are probably thinking jerk . You sure have made mess of your life. but they have been taught to smile smile smile. this...

Scott W O'Neill

August 01

Thanks for all your help and negotiations.

Thanks for the update! I have faith in you guys and will continue my payments. Thanks for all your help and negotiations.

Cassandra Robinson

July 30

That A Settlement Was Entered.

I Absolutely Love You All At United Settlements. You All Have Saved My Credit Solutions. I Would Refer Everyone To You Services.

Diana Cardona

July 16

Tough Financial Hard Times During Covid-19

I signed up with United Debt Settlement because of large credit card debts, which had taken a financial toll on my credit. UDS has an outstanding reputation assisting clients like me achieve financial recovery...

Mildred Yvonne Sherron

July 16

The results of the settlement attempts.

So far, I have found United Settlement more than satisfactory. Very conscientious and very efficient in providing a service in debt settlement. Thank you and all the members of your team who are assisting...

Matthew Fry

April 10

No hassle service

Quick fast and no hassle

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Related:

• Debt Settlement
• Tax Debt Relief
• Can You Negotiate Your Own Debt
• Debt Consolidation
• Debt Management

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• Debt settlement and debt consolidation are debt-reduction strategies.
• They have different functions:
  • Debt settlement usually reduces the total amount you owe.
  • Consolidation combines all of your debts into one monthly payment.

How Does Debt Settlement Work?

• Usually only available for delinquent accounts with several months of missed payments.
• Debtors need to show an inability to pay the original amount.
• Certain debt savings from debt settlement are taxable.
• Step-by-step:
  • A debtor negotiates with creditors to try and reduce the total amount owed.
  • Successful negotiations result in a lower payoff amount.
  • The new amount is documented in writing.
  • The debtor sends a monthly payment to an escrow account.
  • Once the account has enough money, the debtor usually pays it off in one lump sum.
• Why do creditors agree to a lower payoff amount?
  • There’s a lower chance they’ll get the money back the longer a debt is unpaid.
  • Creditors can cut their losses by offering a lower payment amount.
  • Settlement helps lower the risk of a debtor filing bankruptcy and having debt discharged.

How Does Debt Consolidation Work?

• Good for people with lots of different unsecured debt.
• Combines multiple unsecured debts into one monthly payment.
• Consolidation can involve a Debt Management Plan (DMP):
  • The debtor consults with an experienced credit counselor.
  • The counselor gives actionable advice to control expenses.
  • The debtor, credit counselor, and creditors create an agreement for debt repayment.
  • The debtor pays one combined monthly payment to the counseling agency.
  • The agency allocates funds from the monthly payment to individual creditors.
  • Credit accounts are closed, which can hurt credit scores.
  • A DMP appears on credit reports but does not hurt credit scores.
• Or a Debt Consolidation Loan (DCL):
  • The debtor takes out a new loan.
  • The new credit account often has lower interest rates or payment amounts.
  • Funds from the DCL are used to pay off all existing unsecured debt.
  • A DCL allows a debtor to focus on one streamlined monthly payment with one creditor.
• Consolidation loans aren’t taxable.

Which One is Right for You?

• Debt settlement could be a good fit if you are financially unable to pay back debts.
• Debt consolidation could be best if you want to simplify multiple payments.