Debt settlement is for those people who can't grip the debt consolidation programs running in the market. Debt settlement program is for those who even can't manage to pay for the minimum payments of the debt consolidation program or even not able to pay the due bills of last six months.

In this arrangement debtors do not need to repayment immediately to their creditors. The concerned Debt Settlement Company collects the monthly payments from you and deposits it to your account or in their account. You can repay your creditors in easy installments.

During the settlement session while you are repaying your debt in easy slabs, the debt settlement company bargains with your creditors for a lower payoff of 40 to 50 % of total debt. Once this negotiation goes successful, the debt settlement company pays off the whole amount to your creditors.

As the debt settlement companies negotiate with the creditors for lower pay offs, they are sometimes called Debt Negotiation Companies, as well. One major aspect should be remembered by the debtors that pursuing for debt settlement scheme is the last arms before applying for bankruptcy. So sometimes it proves to be very risky if somehow debt settlers fail to negotiate successfully then the debtors won't have any other choice to get rid of the debt. As the credit card companies consider the consolidated debt as a negative aspect, so in future the debtors have some negative impact in credit bureaus; it affects in some difficulties in future for getting new credit cards, loans etc. So, the debt settlement counselors try to convince the creditors to report the debtors' accounts as paid in full to the credit bureaus. The credit scores will be affected for even 7 years, if the accounts are shown as Settled or even consolidated. To avoid such reports debtors can pursue for the credit repair packages to remove the negative remarks from their credit reports.

So, these are some ways through which you can consolidate your credit card debt and can have a debt free happy life! But as the prevention is better than cure, so my suggestion is to use the credit card as an emergency commodity not as a luxury commodity.