Debt settlement is a bankruptcy alternative, where you negotiate with creditors on the interest rate and the amount owed. It can be advantageous for those with too many assets for bankruptcy and can save money on certain debts such as medical. However, it comes at a cost, including negative credit impact, potential IRS tax liability, and the inability to settle secured debts like mortgages or car payments.

Debt consolidation combines multiple debts into a single loan with a lower interest rate and a single monthly payment. Debt consolidation can make debt easier to manage and can potentially save you money, but it’s important to note this doesn’t eliminate debt.

A line of credit can provide access to additional funds with a lower interest rate. However, it’s important to use a line of credit responsibly to avoid accruing more debt. If your credit is poor, this option may not be available.