Is it a good idea to use a loan to partially finally settle a defaulted debt.

13thlegion

The only way it would be a not bad idea is if you have an offer in your hand today from where you owe saying they will accept a specific reduced amount. Unless you have that cast iron guarantee you are simply moving a debt sideways and probably diagonally in the wrong way as a defaulted debt has no interest but a loan would have huge interest.

The best idea is to save up and pay a settlement figure yourself. You won't face any interest (might even earn a little) and the feeling of accomplishment will be oh so sweet.

Best of luck, I am sure you will achieve your goals. There is lots of advice on these forums and plenty of people who are in, or were in, similar positions.