CuraDebt FAQ: Your Debt Relief Questions, Answered

For unsecured debt, the main paths are a consolidation loan (one new loan repays your balances at a lower rate if you qualify), a nonprofit debt management plan (your balances are restructured into one payment, often at reduced interest, with no new credit), and debt settlement (a company negotiates settlements on unsecured debts for a negotiated amount). Which fits depends on your credit and whether you are current or behind.

It depends on the path. A consolidation loan or a debt management plan generally keeps your credit healthier because you continue paying accounts. Debt settlement typically lowers your score during the program, since accounts often go delinquent before they are settled. If protecting your credit is a priority, that helps steer which option fits.

Costs vary by program. For debt settlement, federal rules generally bar a company from charging a fee until a debt is actually settled and you make a payment toward it. Consolidation loans carry interest and often an origination fee. Always get fees in writing, and compare the total cost of each option, not just the monthly payment.

It depends on the method and your balances. A debt management plan often runs three to five years, and debt settlement programs commonly run two to four years depending on how much you owe and what you can set aside. A consolidation loan follows its own fixed term. A quick review can estimate a realistic timeline for your situation.

Debt settlement applies to unsecured debts such as credit cards, medical bills, personal loans, and some private debts. It does not apply to secured debts like a mortgage or auto loan, where the lender can foreclose or repossess, and it does not cover most student loans or child support. Tax debt is handled through separate IRS and state programs.

Debt settlement can be a reasonable path for someone genuinely behind or in hardship on unsecured debt who cannot repay every dollar in full. It is usually a poor fit for someone still current with good credit, who is often better served by a lower-rate loan or a debt management plan that avoids the credit-score impact settlement carries.

Debt consolidation combines your balances into new borrowing you repay in full, ideally at a lower rate, and requires you to qualify for credit. Debt settlement resolves unsecured debt for a negotiated amount and is built for people already struggling. Consolidation reorganizes debt; settlement reduces it. They suit opposite situations.

Sometimes, yes. If you can qualify for a low-rate consolidation loan or negotiate with creditors yourself, you may not need a program. Help tends to matter most when you are behind, juggling several creditors, or facing collection pressure. A quick review can tell you whether a do-it-yourself path is realistic for your numbers.

Tax debt follows a different track from unsecured consumer debt. The IRS and state agencies offer programs like an Offer in Compromise, installment agreements, and penalty abatement. If your main issue is back taxes, the tax relief path applies rather than settlement or a consolidation loan, and you can check what you may qualify for separately.

CuraDebt is a free service that reviews the information you submit and matches you with a licensed, independent provider suited to your situation; CuraDebt itself does not perform the debt relief service. You share your approximate balances, see which options realistically fit, and decide from there, with no obligation to proceed.