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of debt consolidation are not at all ways to pay off debt – short term. For example, a debt consolidation loan might get you debt free but it would likely take 5 to 7 years. Plus, when you take out that loan you will not really reduce your debts. You're simply transferring them from one set of creditors to a new one. You probably would get a lower interest rate and a lower monthly payment but you’d end up paying more in interest over the life of the loan because of its longer term.
Consumer credit counseling
A second way to become debt free is consumer credit counseling. If you're not familiar with this, it's where you go to an agency or company that helps you develop a debt management plan (DMP) for paying off your debts. If you stick with the plan, which is not a given, you might become debt free but it will probably take five years.
Paying off debt via debt settlement
Many American families have turned to debt settlement as a way to become debt-free because it represents the only alternative for getting your debts reduced. And it could help you become debt free in just two to four years. If you are not familiar with debt settlement, it's where you contract with a company that then negotiates with your lenders to get your balances reduced. In many cases, a good debt settlement company can get debts reduced by as much as 50%. This would cut that hypothetical $20,000 in debts down to $10,000. Plus, you would be presented with a payment plan that you would be required to approve before the company charges you anything for its services. In fact, if you talk with a debt settlement company that requires upfront fees, run a way. It might actually be a scam. In fact, the Federal Trade Commission has filed suit against a number of these companies over the past few years for that reason as it illegal to charge upfront fees before settling a person’s debts.