Debt settlement is the process of negotiating down your debts so that they are more affordable. This is why debt settlement is often referred to as debt negotiation.

Do it Yourself Debt Settlement

The process can get fairly complicated, depending on the number of accounts that need to be negotiated. Typically, a person will be in debt to several credit card companies before they start to seek help through debt settlement.

Use the debt calculator above in order to see some interesting information about the debt that you have. The calculator will tell you how much it would cost in monthly payments to pay off your debt in full and then how much you could save with NetDebt.

Then you can try CuraDebt, Debt Shield, or 123 Be Debt Free for your debt settlement needs. These are organizations that can help negotiate your unsecured debt down to a fraction of what you were previously paying per month.

Unsecured Debt Only!

Debt settlement is only for debts that are unsecured such as credit card debt, medical bills (only those that have already been handed over to a collection agency), cards from department stores, revolving charge accounts, unsecured lines of credit, etc.

You cannot use a debt settlement company for debts that are secured. This would includes auto loans, home loans. Another type of loan that cannot be negotiated is government backed student loans. If the student debt is not backed by the government then it can probably be reduced with debt settlement.

The first thing that you may want to learn is how much the debt settlement service costs. In general, they usually charge a percentage of the amount of debt that is reduced.

They may have you set up a special savings account, through them, that can be used in order to pay a lump sum monthly payment that encompasses all of your unsecured debts. They would then take their cut from the amount of money that you are required to deposit into this special savings account each monthly.

You also want to make sure that the debt settlement company sends reports to the three major credit reporting agencies. This is important, especially if you are interested in rebuilding your credit rating. If they report on a monthly basis then that's even better!

Check to make sure that the debt settlement company is a member of the Better Business Bureau. Once there, you will be asked for your zip code so that you can visit the online BBB that is closest to you. Then there is a button that allows you to check out a business or charity so that you can get more information about them.

You may need to investigate a few debt settlement companies before you can find one that you are comfortable with. Take your time and choose wisely. The debt settlement process can take between one and four years so you will be tied to this company for quite some time.

There are basically three alternatives to debt settlement. They are debt management, debt consolidation loans and bankruptcy.

Of course, the best of these three would be debt management. With debt management, you simply find a way to arrange your finances so that your dollar goes further and pays off your highest debts and those with the highest interest rates, first. With debt counseling, you may be able to get a rein on your debts and start heading in the right direction. If you are past that point then you may need to try something else, such as a debt consolidation loan.

A debt consolidation loan is another debt. However, this debt should wipe out your other debts. The idea is to get a debt consolidation loan that offers you a significantly lower monthly payment than if you were to add all of your current payments together.

The final alternative to debt settlement is bankruptcy. If you are forced to take this route then the best thing that you can do is to hire a good bankruptcy attorney. Keep in mind that a bankruptcy will follow you around for many years.

Take a look at all of your options. If debt settlement seems like the proper route for you to take then go ahead and start the investigation process so that you can find the best company to work with.