Don't Do Debt Consolidation ... Do this Instead 👀

Let’s Be Honest — Most Aren’t Consolidating Anything

Many companies advertising “One low payment!” are debt settlement companies in disguise.

They make their money by getting you to stop paying your creditors, then “negotiating” a payoff — all while your credit takes hit after hit.

How Debt Settlement Really Works (The Setup)

• You pay the company, not your creditors.

• They stop sending payments to your accounts on purpose.

• Your accounts go late → into collections → get charged-off.

• After months (or years) of damage, they try to negotiate a lump-sum settlement.

Sounds like help? Think again.

The Credit Score Damage

Late Payments: Just one 30-day late can drop you 50–100 points.

Collections & Charge-Offs: Stay on your credit for up to 7 years.

High Utilization: Balances remain high during “negotiation.”

No Positive Reporting: While they “help,” you’re building zero positive credit history.

The Hidden Financial Risks

• Huge Fees: Often 15–25% of your total enrolled debt.

• Tax Surprise: Forgiven debt may be taxable income.

• Lawsuits: Creditors can sue you while you’re “waiting” for settlement.

Companies to Be Careful With

These have been repeatedly reported by consumers for harming credit and using high-fee settlement tactics:

• Freedom Debt Relief

• National Debt Relief

• CuraDebt

• Accredited Debt Relief

• Pacific Debt Inc.

• Debtmerica

• Century Support Services

• ClearOne Advantage

• Beyond Finance

• New Era Debt Solutions

(Note: Many of these market themselves as “debt consolidation” but operate primarily as settlement companies.)

What You Should Do Instead (Protect Credit + Pay Off Debt)

Debt Management Plan (DMP) – (I Can Creat you a plan)

Negotiate Directly with Creditors – Ask for hardship programs or lower APRs.

Balance Transfer Credit Card – 0% APR for 12–21 months if you qualify.

Snowball or Avalanche Method – Pay off one account at a time.

Boost Income – Apply extra earnings directly to principal.

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