If you're knee deep in debt, cannot pay your bills and wish to avoid collection calls, you may consider debt settlement  (also known as debt negotiation).  This is when you negotiate and reduce the outstanding debt by 40-60% of the amount you owe.  The creditor forgives the remaining debt thereby helping you to get out of debt faster.

With proper help you can

• Lower your monthly payments
• Reduce interest rates
• Waive late fees
• Eliminate collection calls
• Avoid bankruptcy
• Have only one monthly payment
• Become debt free

How settlement (or credit card debt settlement) works

Debt settlement companies offer a settlement program wherein they negotiate with your creditors/CA in order to settle the debt for less than what you owe.  The companies charge an upfront fee for their services.  Given below is an example of how debt settlement or credit card debt settlement works.

How credit card debt settlement works - An example

Let's say Jesse owes a total debt of $100,000 on 5 credit cards.  She is finding it difficult to keep up with the minimum payments.  She has earlier consulted a credit counseling agency but the monthly payments they negotiated with her creditors were too high for her to pay.  Jesse doesn't want to file bankruptcy as she does not want to involve the court.  So, finally Jesse ends up working with a credit card debt settlement company XYZ.  Here are the 4 steps on how Jesse could settle credit cards and pay off her dues.