Perhaps you got laid off or your company went out of business or you were hurt in an accident, not insured, and now owe a mountain of hospital bills.
So you're considering using a debt settlement company to help you get back on your feet.
This is never easy but with a reputable firm it can be accomplished.
However you need to know how these companies work.
Debt settlement companies as well as any other company or business are in business to make money.
These companies do this by charging you a fee.
Therefore you need to know up front how much they will require in order to begin working to settle your debt.
You will probably have to spend some time putting aside some money in order to satisfy there fees.
The fee you are charged should not be greater than your original debt.
Also, beware of hidden costs and fees.
Debt settlement companies place the money you have given them into escrow to give them leverage in negotiating with your credit companies.
They will seek to eliminate or reduce as much of your debt as possible.
They do this by convincing the company you are indebted to that it is in their best interest to help you reach a settlement thereby reducing their losses.
If you are forced into bankruptcy they may well end up getting nothing while you have all your debt to them wiped out.
So why not go straight to bankruptcy? Bankruptcy is complicated, time consuming and in the end you may still owe some money.
Then there is the embarrassment and stigma associated with bankruptcy.
And last but not least, bankruptcy can damage your credit for several years whereas as a successful debt settlement can actually improve your credit and help you to get back to a normal life, free of the hassle and stress of annoying phone calls and threatening letters.
Getting out of debt is serious business and all options should be carefully considered.
Get references on any debt settlement company before choosing which one to go with, Make sure they are highly rated by reputable debt settlement industry organizations.