The current economic climate has certainly brought many bad consequences with it, but one perhaps less obvious effect is the glut of rip-off merchants getting on the debt help bandwagon.   I suppose it was inevitable that some people would see the financial problems of people as an opportunity make a quick buck, but it is still disheartening. The good news is that these people are the exception and their irresponsible practices should not be taken to mean that the process of debt settlement (or negotiation as it is often known) is inherently bad or that the good debt settlement companies do not help many thousands of people to get out of debt each year.   You just need to be clear in your mind about what the process involves, so that you know what to expect and what questions to ask if you do approach a company.   You also need an awareness of the things to look for when you want to find a reputable debt settlement company, so that you can easily avoid the bad ones. Debt settlement should not be confused with debt management or debt consolidation.   Unlike the other two, it involves a negotiated reduction in the actual amount of money you owe.   With debt management and consolidation, you still end up paying the full debt back, just on different terms which make it more affordable for you. Settlement companies are specialists in negotiating with creditors to get substantial discounts off the original amount owed.   It is not unusual for more than half the debt to be written off.   By achieving these huge reductions they are able to offer you a much lower monthly repayment amount than a debt management plan could.   Debt settlement is usually for people with very serious debt problems, who may well be considering drastic alternatives such as bankruptcy. Any debt help company needs to be paid for their services, but the ones who have caused concern and dissatisfaction are those who have charged substantial up front fees and then not delivered on the promised debt reduction.   With a good debt settlement company you will not have this problem, as their fee is likely to be only a percentage of the amount they manage to reduce your debts by.   On this basis you cannot lose.   The best ones even offer a written guarantee of what the results of your settlement will be, so you are perfectly safe.   Go to the right debt settlement company for help and you will not have a problem. The way debt settlement works is that you stop paying your creditors and start paying a regular amount in to a separate account.   The debt settlement company will deal with your creditors on your behalf, and negotiate deals to settle your debts at the best possible rates.   They know exactly how to time this to maximise the discounts they can achieve.   The money you pay into the account builds up and is used to settle debts as each one is agreed. One of the main benefits of using a debt settlement company is that you only have one monthly payment to find, and this is an amount that you can afford.   You are also freed from being hounded by creditors as the settlement company deals with them for you.   Debt settlement provides a much less drastic alternative to bankruptcy, and leaves you debt free within a set time period. Debt settlement is tried and tested in the US though is not widespread in the UK because there is a good alternative, called an IVA.   This is an individual voluntary arrangement and also involves writing off large portions of your debt to make it affordable to pay off the remainder in a set period. So debt settlement companies are not all bad, but if you are considering it you should take great care to choose the right company to work with.   The best starting point is to look for well established and reputable settlement companies, who have a history of solving serious debt problems successfully.   Always apply to more than one, so that you can compare what you are offered, as proposals do vary.