Debt settlement companies work as a middleman between you and your creditor. If all goes well (and that's a big if), you should be able to settle your debts for cents on the dollar. You'll also pay a fee to the debt settlement company, usually either a percentage of the total debt you have or a percentage of the total amount forgiven.

When you default on a secured debt, the creditor takes the asset that backs up that debt. When you convert credit card debt to mortgage debt, you are securing that credit card debt with your home. That's a risky proposition.

One thing I want to make clear: You never want to hide from your debts. It doesn't work.

If you default on an unsecured debt, you won't lose anything (except points on your credit score).

You fall a bit behind on a credit card bill, your interest rate soars, your minimum payment rises, and you start falling more and more behind every month. You don't see an end. But you don't want to file bankruptcy either. What you can do - and should do - is negotiate.

If you have even a smidgen of doubt that you'll be able to stay away from racking up additional debt, don't do it.

It's not about having it all. It's about having what you value most.