Debt settlement can be done by outside agencies or 3rd party. They can help to settle your dues with the lenders. However it’s imperative that you check the credentials of these third party financial settlers. True that they can settle your debts for less. But in any case a major chunk of the debts have to be paid by you. Before you hire a financial advisor some such third party to handle debt accounts for you, make sure that they are recognized and certified. Check with the State Attorney General’s Office for Consumer Protection to see whether they are genuine.
There would be a certain fees and commission charged by the financial advisors also. Remember to ask them before you enter into a deal with them. Also remember that your credit rating will be affected for some time negatively. Don’t be fooled by people saying that they can make your credit rating positive. They are just con artists out for making a quick buck. Nobody can make your credit rating positive. Only if you have paid your dues, can the credit rating become positive.
Lenders can still take legal action against the debtors even if they use a debt settlement service. Remember even if you apply for delinquency, the bank will still charge you over late payment fees, limit fees or any such charges that they may have. Therefore it’s very important that you pay your debts as soon as possible.
Debt settlement is a dirty word to many creditors. Mention it and they will say anything in an attempt to discourage you from going ahead. They would much prefer you stay in debt and pay them interest payments for another 30 years. So don't be put off by their grumblings, it is all about keeping you on the leash, a cash-flow source for a few more decades.