If you are an individual who is having restless nights and forfeiting sleep due to your credit card debt, then logically you are considering all of your options on how to fix this predicament. You might have spoken with numerous companies or spent tireless hours searching out the web to come to a determination whether to go the avenue of debt consolidation or credit card debt settlement.

What it truly boils down to is the debt situation that you are currently in. If you don't have a very high sum of debt and are not having a very difficult time paying it down then debt consolidation could be a more logical fit for you. What the debt consolidation company can do is minimize the interest rate on your debts, and set up a reasonable repayment program in which the company will spread out the monthly payments to the creditors on your behalf. At the finish line of the process you will become debt free, however the process can take up to five years and you do have to pay back the entire amount plus interest. But you will in the end be released from the shackles of debt.

Now will debt consolidation be the right decision for everyone, absolutely not. Debtors will not really have too much of a decrease in the amount of funds that you must pay to creditors each month. So for those of you who are really struggling to keep up or have fallen past due, debt settlement could be a better option. The most viable applicant for debt settlement is somebody who is around $15,000 in debt or more and are having real difficulties keeping up with the minimums. Seeing that in debt settlement you will have a much lower amount you put out each month because you are not going to be paying back the debt in its' entirety.

Basically the differentiation boils down to this, with debt consolidation you pay back around 135% of what your balance is now, which is a gigantic difference from the amount you would be obligated to pay using the minimum payment scheme. But it is also a far cry away from the money you will pay back with settlement. Utilizing debt consolidation it will also take you around five years to be free of debt. Debt settlement can look to save somewhere like 40-50% of what your original balance is and become out of debt in 2 years or less, all dependent on how fast you can raise the cash it takes to achieve the settlement.