Meet B. B. is a typical housewife, devoted to her husband and her children. A few years ago, B. was having a tough time paying off her debts. She had accumulated massive amounts of debt on her credit cards and also still owed quite a bit on her home. Her husband was out of work and she was struggling to make ends meet. However, she figured she could turn around her entire situation by getting a debt consolidation loan against her home. She met with a smooth talking man from the bank who explained how she could refinance her home and end up with a lower monthly payment each month. It seemed to be an ideal situation and she quickly signed on the dotted line. Of course, what B. didn't realize was that she had just agreed to an ARM, an adjustable rate mortgage, which had a lower initial payment but much higher payments down the road once the teaser rate runs out. Today, B. is struggling to get by and worries she will lose her home. “The guy mentioned something about it being an adjustable rate mortgage, so I guess I can't blame him, but I really didn't think it could go up that much,” she says. The sad fact is that it can and it does.

If you are reading this article and shaking your head smiling, saying to yourself, “I know better. I'm not going to fall into that trap,” then check out this cautionary tale which offers another reason why debt settlement can be a better choice than debt consolidation loans:

D. is a pretty smart guy. He graduated top of his class in high school and went on to college at the tender age of 16 years old. He married young and he and his wife, V. have two young children, a boy and a girl, aged 10 and 7 respectively. “After the children were born,” D. explains, “everything became so much more expensive. The diapers, the tuition when our son started kindergarten. We just fell behind on our bills and decided it was time to take out a debt consolidation loan.” The couple looked into the various options, carefully weighing the pros and cons and chose a loan which allowed them to borrow from the equity in their home to get caught up and start making payments regularly. D. was smart enough to avoid the adjustable rate mortgages and chose a fixed rate, 30 year loan at an historically low rate. It would seem that D was a success story, except for one small problem. Today, three years after they took out the loan, D. and his wife find themselves back in debt to the credit cards and now facing those bills plus the second mortgage on their home. The problem? They didn't have anyone work with them to make their debt reduction plans stick and so they returned to their old habits once the credit cards were freed up again.

A quality debt settlement service doesn't just arrange to get you out of debt. They will also help you to:

• learn to manage your credit better
• make a realistic budget that you can live with
• understand why you got into debt to begin with so you can avoid it in the future.

Finally, while D. and B. both have massive loans to pay off for the next 15 and 30 years respectively, once you finish paying off your debts through a debt settlement consultant, you're done. You have no more debts to pay and you needn't worry about your creditors seizing your home or your car.

You owe it to yourself and your family to consider all the fact and to decide, carefully, is a debt reduction loan a better choice? Think carefully and we think you'll agree that debt settlement can be a better solution than debt consolidation loans.