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.

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.

By definition, saving - for anything - requires us to not get things now so that we can get bigger ones later.

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.

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.

You really don't need to hire a debt settlement company to negotiate with your creditors.

Even in the days of the tightest credit in 2008, HELOCs [ home equity line of credit ] and home equity loans were being made.