Debt Relief Services

If you are seeking to avoid bankruptcy and truly are attempting to pay off all of your debt, then a debt settlement program could be an option for you. Debt settlement companies typically can negotiate a settlement for you with your creditors and oftentimes this helps to reduce your debts to approximately half of their current amount.
How Debt Settlement Works
Once a debt settlement company has negotiated a settlement amount with your creditors, then you will need to begin sending in one monthly payment to the debt settlement company. At that point, the debt settlement company will forward the appropriate amount of money that is due every month to each of your creditors.
Some debt settlement companies will require that a type of escrow service or other account be set up. In addition, the debt settlement company will normally require that you transfer power of attorney to the creditors.
By transferring power of attorney, this will actually force your creditors to work directly with the debt settlement company. This should also stop your creditors and / or collection agencies from continuing to call you.
Debt Settlement Services
It will typically take up to two years in order for all of your debtors’ accounts to be settled. This time frame, however, will be based on a number of factors such as the affordability of payments, the number of creditors that you have, and who the creditors are.
Settlement with your creditors can cost money, too. For example, the debt settlement companies normally charge somewhere in the range of between 15 and 30 percent in fees for their services. However, your new payment to pay off your debts will still likely be approximately 25 percent less than the payment that would have originally been required by paying each of your creditors separately every month.
What is a Debt Management Program?
One of the primary differences between a debt settlement company and a debt management program is that through a debt management program, your creditors are paid on a regular monthly basis. In a debt settlement program, however, the creditors are no longer paid until you have built up enough money that will subsequently allow for the debt settlement company to start the negotiation procedures in order to move towards reducing the amount of your debt and to then secure a lump sum settlement.
A debt settlement program can also have a negative effect on your credit score and your credit rating, as versus a debt management program that – after a certain amount of time has passed – could actually have a positive effect on your credit score. In any case, however, either option may still be damaging to your overall credit worthiness. 
There is one other alternative that could be an option. This is called a 60/60 settlement option whereby, under certain circumstances, you may be able to make an offer to repay at least 60 percent of your debt over the course of 60 months. It is important to discuss this option with an attorney that specializes in bankruptcy or debt settlement prior to moving forward though.
Debt Settlement Pros and Cons
Overall the pros and cons of debt settlement include the following:
Your payments are roughly half of what they were prior to debt settlement
You cut the time until you are out of debt from approximately 18 years down to 5 years
You will no longer be charged high credit card fees and interest charges
You will likely no longer receive calls from collection agencies or your creditors
It will decrease your overall amount of debt
It can harm your credit score
You can no longer use your credit cards
You must rebuild your credit