When it comes to debt, there are basically three different types. These include unsecured, secured and government. Unsecured debts include credit cards, personal loans and other types of bills that are not secured by some type of collateral. As you may expect, secured debts include a mortgage or auto loan because the loans are secured by valuable property. Certain types of charge accounts, including those obtained at furniture and/or electronic stores, are also secured because the lender retains a "security interest" in the item(s) with the right to repossess the property if it is not paid for. A government debt includes student loans and/or taxes.

Now that you are familiar with the various types of debts, it's important to know which ones are eligible for debt consolidation and/or debt settlement services. The most common reason that people will enter into either of these programs is because of high interest credit card debt, which means unsecured debts are eligible for debt relief programs. Secured debts, as discussed earlier, are not eligible and must be paid outside of a debt relief program. A mortgage or auto lender will not be willing to negotiate a debt settlement or lower payments and interest for the life of the loan. Government debts are also not eligible for debt consolidation and/or debt settlement services and, too, must be paid separate from the program.

If you are in need of debt relief and consequently are considering a debt consolidation or debt settlement service, the non-profit agency handling your debt negotiations will be able to answer questions regarding which additional debts may or may not be eligible for inclusion in your program of choice.

When you sign up for either a debt consolidation or debt settlement service, it's a good idea to place all of your unsecured debts on the program. Most non-profit agencies will recommend this due to the fact that creditors may feel that you are being selective in which debts to single out and request lower payments and/or interest from. If you are in true need of debt relief, your best bet will be to place all of your credit cards on the program and eliminate all of your debt at the same time. If any creditors find out that you have not placed every eligible debt on the program or if you start the program and then apply for another credit card, they may revoke your lower payment and/or interest and return your account to past due status. At the very least, they may refuse to accept the proposed debt relief plan. In a worst case scenario, the creditor could return your account to past due status and begin charging penalty interest once again.

In conclusion, if you are planning to enroll in a debt consolidation and/or debt settlement program, include all eligible debts and avoid applying for new accounts until all of your old ones are paid in full through the debt relief program.