It is quite possible for an individual to settle the debt himself or herself.
However, it is a stressful process dealing with several creditors over a period of many months.
At the same time most debtors do not have any financial training and do not know their own rights as debtors.
Hence it is best to hire the professional services of a company.
Once you have hired a debt company you need not deal with the creditors at all.
Even the collection calls are handled by the settlement company.
Enrolling in the debt settlement program of a company is very simple.
All you need to do is log on to the web site of the company and fill out their form asking for personal and financial details.
You may also need to sign an agreement empowering the settlement company to undertake the settlement procedure on your behalf.
Once this is complete the settlement company will start the negotiation process with the different creditors.
It is important for debtors to know how professional debt companies negotiate debt settlement deals.
They first identify the different creditors and separate the debts into secured and unsecured ones.
They then prepare an analysis of the debtor's income and expenditure and deduce his or her actual paying capacity.
Once this is done they approach the individual creditors.
They put forward a proposed amount for settlement.
The creditors then perform their own analysis of the actual paying capacity of the debtor and offer the settlement amount which they think the debtor can pay.
The settlement amount is decided by the consent of both the settlement company and the creditors.
Once the payable amount is negotiated, the settlement company requests the creditors to reduce the rate of interest on the amount now payable in installments.
The settlement company also requests the creditors to waive off the late payment and non payment penalty charges.
Through the negotiation procedure, settlement companies are able to reduce the payable loan amount by 50%.