Because debt settlement will not work for everyone, here are a few qualities that make someone a good candidate.

• You owe $10,000 or more

• You have a lump sum of money available to settle your debts (from a friend or family member, a loan, savings, etc.), or the ability to pay a large amount into a trust account on a monthly basis to be used to settle your debts once enough is saved.

• Your debt is mostly unsecured debt, meaning there is no collateral involved. This kind of debt – credit cards, medical bills, bounced checks, etc. – work better for debt negotiation.

• You have an explanation for high debt that you cannot pay. Maybe you lost your job, faced a family emergency or death. Or maybe your interest rate was raised, or other fees were added to your debt.

• Most importantly, you have a strong long-term commitment to becoming debt free. Debt settlement is not usually a quick process, and if you are not willing to commit to financial discipline during and after your debt settlement, you may find yourself in a situation far worse than when you started.

When seeking a solution to debt relief, you have many different options. Consumer Credit Counseling Services, debt consolidation loans, bankruptcy, and debt settlement are the most common. Of course each one has its own unique pros and cons, and each one will benefit some individuals more than others; there is no single debt solution.

Some of the disadvantages of debt settlement are:

• Unlike in declaring Bankruptcy, you have to legal protection, meaning you can be sued by a creditor for failing to make payments. If this happens while you are in a debt settlement program and you do not have enough funds in your trust account to immediately settle the debt, you may have to file for bankruptcy.

• Also, debt settlement has an unavoidable negative impact on your credit score. This is due to the fact that while in a debt settlement program, you stop paying your creditors.

Some of the advantages of debt settlement:

• Unlike in Consumer Credit Counseling or a debt consolidation loan, both of which require you to pay back your debts in full, including interest, in a debt settlement, you only pay a percentage, usually around 50% to 70% of your debt, including fees.

• Debt settlement, while negatively affecting your credit during the process, leaves no permanent scar on your credit history like filing for bankruptcy does.

• Also unlike in bankruptcy, in which your credit history is paraded about in a courtroom, debt settlement is private.

• Finally, debt settlement is a more rapid way to achieve debt relief than your other options. It can take as few as 4 months, but definitely less than 2 years. Credit counseling, and bankruptcy take 3-5 years on average to get you out of debt.

Not everyone will benefit from or even qualify for a debt settlement program, but checking with a debt settlement firm is the first step to finding answers.

Before answering this questions, we need to understand what exactly a credit rating is and how it is determined.

Put simply, your credit report is determined by your history of borrowing and repaying. If you pay your bills on time, and manage your debt well (meaning you don’t live beyond your means, accruing more debt than a small per cent of your income), your credit score will remain healthy. Other things, including your profession, and stability or lack thereof, also affect your credit report. When you apply for new credit, or for another type of loan, the lender or creditor checks your credit report to determine your creditworthiness, or how likely you are to pay your debt back. If your credit is good, you generally benefit from more loan opportunities, and lower interest rates.

Unfortunately, taking part in the debt settlement process will damage your credit rating. There is no way to avoid this for the simple reason that you stop paying your creditors. However, if you are having a difficult time making payments on time, your credit may already be bad. Keep in mind that other debt solutions, including Consumer Credit Counseling, and Chapter 13 Bankruptcy, also negatively affect your credit, usually more so than debt settlement because they are more prolonged. This means that it is longer before you are out of debt and on your way to restoring your credit. Also, declaring bankruptcy leaves a permanent mark on your credit record; debt settlement does not.

Upon completing the debt settlement process, you can quickly begin making efforts to restore your credit. The easiest way to do this is to pay your bills on time and limit the number of credit cards you have, and the amount that you use them. There is no quick fix for your credit score, only time and financial discipline.