Do you feel like you are drowning in debt, and have overdue bills coming in every day and you can't even continue to make the minimum payments and you fell like bankruptcy is your only option? If so, a debt settlement program may be something that can help you. If your objective is to keep from filing bankruptcy but you don't have enough money to pay your debts in full, then you may be able to settle your debt with a savings of 40% or more. A debt negotiation program is also known as a debt settlement program.

Debt negotiation and debt settlement is a process that helps you pay off all of your credit card bills, and get you out of debt faster - often at a savings of 40% or more. It is a more aggressive approach to getting out of debt, and usually you must be behind in your payments to be able to get the creditors to negotiate with you on a settlement. Debt negotiation can be very risky, and have a long term negative impact on your credit report and, in turn, your ability to get credit. That's why many states have laws regulating debt negotiation companies and the services they offer.

A Debt Negotiation Program should be viewed and considered as a last-resort measure. It is only a half step before bankruptcy and is primarily designed for people who are having financial difficulty and are either unable to complete credit card counseling (also known as CCA) programs, are close to filing for bankruptcy, or have experienced setbacks and are no longer able to continue making minimum payments. Over 65% of consumers fail to complete credit card counseling programs. Most generally a lender has little motivation to settle for a pay off less than the full amount unless the debtor is already 2-3 months behind on bills. This is exactly what negotiation is and which means it is a complete destruction of a credit history.

Advantages of a Debt Negotiation Program:

• End harassing phone calls from your creditors.
• Significant debt reduction on your credit cards, personal loans, lines of credit, leases, etc.
• Restructure existing debts to avoid bankruptcy and increase cash flow.
• Satisfy your creditors for what you can afford.

Disadvantages of a Debt Negotiation Program:

• Any forgiven or settled amount (outside of bankruptcy) which exceeds $600 will be reported as taxable income.
• Make sure you get an agreement by the collector or lender in writing that the debt will be reported to the credit bureau as "paid as agreed" or "satisfied in full". Otherwise the debt will appear as "R9" which is the lowest possible rating and will remain on your credit report for 7.5 years.

Anyone who plans on using a 3rd party to handle their finances should check them out with the BBB and State Attorney General's Office of Consumer Protection, before going forward with the Debt Negotiation and Debt Settlement Programs. If you decide to go forward with a debt negotiation or settlement program make sure as part of the settlement, an agreement by the collector or lender in writing that the debt will be reported to the credit bureau as "paid as agreed" or "satisfied in full". Otherwise the debt will appear as "R9" which is the lowest possible rating and will remain for 7.5 years.