I tried both ways, but when I read the fine print on the settlement company I noticed it was not a good idea. I am doing it on my own little by little and feel more accomplished.

If I spent the money, it's my responsibility to pay it back.

Have tried it and found out it is better to do it on your own. It was costing me $20.00 a month, now I just put the money towards the credit card bill.

Transaction costs for debt settlement can often eat up the "savings" you think you have off your debt. These guys aren't offering to help you for free! Plus, you're involving a third party into the debt relationship. Own up, pay what you owe, and if that's not possible, work it out directly with the company or file for bankruptcy.

I have not done it but recommend it to clients as a possible alternative. In her new book "Suze Orman's 2009 Action Plan" Suze notes that to qualify for settlement you need to be very behind on payments and have enough cash to immediately pay the reduced balance.

I thought about it last year but went in another direction. I decided to refinance my house and pay them off fully. Mainly because the other way would have been pretty damn close to being treated as a bankruptcy and didn't want to wait 7 years to have good credit again.

It's always good to have options, but the way to have the most options is to not get into debt in the first place. I would recommend looking for help long before credit card and debt settlement come into play.

Debt settlement is generally an ongoing symptom IMO. People want stuff that they can't afford and can't wait to save up for, so they buy it on credit. Then, when they get in credit trouble, they can't wait and can't work through the debt, so they want a quick solution.

Here's a thought: Don't buy stuff you can't afford. If you do, pay the bill rather than looking for a way out.

Now, I know some people are hit by the horrible and the unexpected, like the sudden loss of a spouse in a car accident, etc. that could account for debt and the inability to pay in a reasonable fashion. In such circumstances, it may be the more honorable thing to offer to settle than to bankrupt on the debtors. However, I'd venture a wild guess that this accounts for less than 2% of all settlement attempts.

I've never had credit card debt beyond what I couldn't pay each month so I'm not in a position to speak from experience, but I do have a distrust of all companies that claim to be able to get rid of or lower your debt. It just seems too good to be true.

As another commenter and Jane Austen (in the novel Persuasion) says, "...for after all, the person who has contracted debts must pay them."

I pay off my credit card balance every month. (I think of it more as a debit card with benefits.)

I very foolish allowed the loan officers at school to talk me into student loans. They honestly made it seem like the payments would be nothing hardly at all. Now I have payments equal to my montly rent. I wish I had known to research it better. I am not sure that student loans even qualify for debt settlement and I know I don't have the money to pay it off immediately so even if it did I wouldn't use it.

Yes, I think it's a great idea to settle your debt with the credit card companies. With so many people heading toward bankruptcy, the companies would much rather have a few cents on the dollar, than nothing on the dollar.

Sure, you spent the money. But, you were charged interest on that, weren't you? And credit card companies have NO problem jacking up your rate when they feel like it, or even upping or lowering your balance at will. Even if you've NEVER missed a payment, they can do what they pretty much like with your account.

Hopefully with the new legislation, alot of that will change.

We do not use credit cards. Instead, we pay cash for most purchases, and occasionally use our debit cards. I feel, if you borrow money, you have an obligation to pay it back. Of course, credit card companies have an obligation to be honest and forthright, and upfront about their policies and procedures. In the end, even if you settle, someone will end up paying for the cost of your loan. As a result, the cost will be passed on, to other customers, through increased rates and fees.

If you're going to spend money, you should be responsible for paying it back. I've always worked whatever number of jobs I needed to pay off my expenses each month. I never keep a balance on a credit card. As a result, I've never been in a position to look into any sort of debt management. There are times when I could see it might be needed, such as an unforeseen medical expense.

I've never had to look into it, either, but I guess I'd consider it along with my other options!

Due to a lengthy unemployment after my daughter was born, my husband and I found we had gone through our savings and were using our credit cards for basic survival items. During this whole time, we were inundated with credit card offers, one after another. We also managed to make at least the minimum payment.

A few months later, I was ONE DAY late with a payment and my minimum payment jumped to over $5000! I called the company and they would not budge.

We felt that we had no option other then debt settlement. During this time, we dealt with 2 companies. One company was very helpful and allowed us to settle one of our accounts in a very short amount of time.

The other company was a nightmare. I could never get a hold of them. The creditors called our house constantly because the company never told them we were trying to settle the account. They made all kinds of promises, but once they got their fees, they were nowhere to be found.

Looking back now, I really wish I would have taken any other route available. Go to your local CCCS and ask for help. We are now in the process of declaring bankruptcy and at this point literally have no other options. If you do decide to go though debt settlement, please call your local Better Business Bureau and ask who they would suggest. DO YOUR RESEARCH!!!

I panicked with my debt and used a debt settlement company. They have done their job, they are legit and my debts left with them (I eventually withdrew two accounts from them and settled them on my own) but it was *FAR* more costly to me both in terms of money spent and damage to my credit. Yeah, they saved me 25%-50% on each debt amount in raw terms, but they also collected heavy fees before they would even begin to collect money for settling the debts, plus they collected a heavy fee from each check sent to them, PLUS they collected from me once they settled each debt. THEN I got the tax forms from the creditors since settled debt is considered income, and is taxed like a bonus -- 40% or so. *PLUS* because it took so long and the settlement company strategy is to simple stop making contact with the creditors once they send a single letter stating my intent to settle, that I had a judgment against me (luckily in my state, wages can't be garnished). I withdrew that account and settled on my own, under fair terms. I'm about to pay that debt off, though I'm still going to get wholloped at tax time.

Some banks are real A-holes and will not work with you until it's really fargone. Really, it's in their best interest since they makes oodles of money from you, but they can't let it go to charge-off or else it's too late for them too. They usually start working with you after 90 days, and are a lot more open closer to 180 days, when the charge-off will happen.

I know a lot of people are rightfully suspect of debt reduction/consolidation agencies that work for the credit card companies, but honestly, it can't be worse than what a settlement company will do. Best thing is to try to work with the companies. They won't listen until it's too late and you miss payments, but it's got to be cheaper for you in the long run and less damaging to your credit.

Please, please, please never work with a settlement company!