When you take out a consolidation loan, you are required to put forth collateral.Most often, the required collateral is a second mortgage or a home equity line of credit.Bankruptcy: This should be seen as a last resort as it negatively affects your credit for many years.

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During this program, you receive financial counseling and meet with a financial advisor.

Additionally, the company managing your debt management program contacts your creditors and attempts to negotiate lower interest rates on your behalf.

The top performers in our review are National Debt Relief, the Gold Award winner; New Era Debt Solutions, the Silver Award winner; and Accredited Debt Relief, the Bronze Award winner.

Here’s more on choosing a service to meet your needs, along with detail on how we arrived at our ranking of 10 systems.

This rule strengthened consumer protections against deceptive claims and prohibited debt relief companies from charging advance fees for service.

While a debt consolidation is less risky than other options, like bankruptcy, it still carries a considerable amount of risk.Many of these options work hand in hand or as part of a larger debt reduction program, but in general, these are your choices: Debt Settlement: Settlement is the process of negotiating with your creditors in hopes of reducing the total amount of debt that you owe them.While you can undertake this process on your own, many people choose to hire a professional debt settlement company or lawyer to negotiate on their behalf.When a settlement is reached, the funds that you have been setting aside go toward paying your creditors and negotiation fees.These programs take around two to four years to complete and negatively influence your credit.To pursue bankruptcy, you must qualify and complete the entire process, including pre-filing and post-filing counseling.