A recent survey of debt relief options goes through the pros and cons of various methods to alleviate debt. Interestingly only two involve paying back less than 100% of the balances owed: debt settlement and bankruptcy.
https://blog.credit.com/2013/
Debt consolidation merely collects all your debts under one new loan. This loan may have a lower interest rate than your former debts, but you will also end up paying 100% of the original balances. Debt consolidation also appears negatively on your credit report.
Credit counseling with a debt management plan is very similar. A credit counseling company will try to achieve lower interest rates on debt to make repayment more manageable. The downside to this option is the consumer ends up repaying 100% of the debt with a negative impact on credit score.
Debt settlement involves an active negotiation with a consumer’s creditors to achieve reductions in the principal balance of debt in default. This means the consumer ends up paying less than the original balance, sometimes much less. These settlements can be done in lump sum or term repayments.
Even further, debt settlement done by a qualified attorney gives the consumer a shield against creditor lawsuits. A debt settlement attorney can defend a lawsuit while simultaneously negotiating a settlement. If bankruptcy is not an option, contact a qualified debt settlement attorney and learn more about the only other debt plan that involves paying back less than 100% of the original debt.