You won't be caught off guard and you won't feel guilty, because you'll be spending money that you've allocated for the occasion.

A consolidation makes sense only if you can lower your overall interest rate. Many people consolidate by taking out a home equity line loan or home equity line of credit (HELOC), refinancing a mortgage, or taking out a personal loan. They then use this cheaper debt to pay off more expensive debt, most frequently credit card loans, but also auto loans, private student loans, or other debt.

You settled a debt instead of paying in full will stay on your credit report for as long as the individual accounts are reported, which is typically seven years from the date that the account was settled. Unlike with bankruptcy, there isn't a separate line on your credit report dedicated to debt settlement, so each account settled will be listed as a charge-off.

After explaining why you're in trouble, ask the creditor if the company would be willing to accept a smaller amount. Start negotiations at about 30% of the total amount due, with the end goal of paying 50%.

You must be sure - and I mean absolutely positive - that you have the willpower to pay off those credit cards and not use them again.

You won't be caught off guard and you won't feel guilty, because you'll be spending money that you've allocated for the occasion.

If you'd asked me a few years ago about debt settlement companies, I probably would have told you to avoid them.