What is the different between a debt workout and a debt consolidation for reduction or elimination of credit card debt and other unsecured debt?
• For the context of this discussion I refer to a credit card debt workout as a negotiated settlement of credit card debt. For example if you owed $5,000 on a credit card and made an agreement with the credit card company to pay $2,000 instead of $5,000 as settlement in full on the debt, this would be a credit card debt workout. Firms who perform this type of work may identify themselves as debt management, debt reduction, debt relief, debt workout, debt settlement or a host of other names inferring they help with debt even sometimes including debt consolidation. However, I personally define the specific term debt consolidation as a reorganization of the debt through a credit counselor or taking a debt consolidation loan to pay of the debts in full. Where those with credit card debt achieve debt relief by paying less than they owe I like to call it debt settlement. Other FAQs at Bankruptcy Alternatives address each of these debt elimination options individually or read summaries of opt
