Debt settlement services does not have to mean that you are filing for bankruptcy. It can, but most of the time that can be avoided. There are other ways to reduce your debt, all of which can reduce, rewrite, and reschedule your debts until you have paid them off and eliminated them. By giving these services and methods a chance to work, you improve your credit scores and ratings with future creditors. Here is how these services typically break down. 

Reduce

An agent working for a debt settlement agency takes down the names of all of your creditors. Then they get the phone numbers and call the credit companies and lenders directly. They are licensed to explain your situation and discuss alternatives for bankruptcy. Since most lenders and creditors would prefer to get most or some of the money that is owed them rather than none of the money, they will agree to reduce the amount owed, reduce the interest you are charged, or reduce the fees you are charged for over-the-limit or non-payment. Some creditors will be even more generous and eliminate the fees, remove the fees, or temporarily remove the interest on your account for a set period of time. 

Rewrite

Here is where the agent helps you rewrite some of your contractual obligations with lenders. School loans are excluded, of course, but you might be able to rewrite the terms of any personal loans, unsecured loans, secured loans, and possibly even your mortgage, if applicable. There are some lenders who can rewrite insurance policies for cash value, which may extend to you some much needed cash to pay off everything you owe. 

Reschedule

Rescheduling your debt is akin to refinancing it. The only difference is that you have a large grace period right at the beginning of your new repayment schedule. Typically, debt settlement companies are able to collectively gather all of your accounts together under one account for you, you pay them a monthly fee for the service, and pay them a settlement amount which is then distributed to all of your lenders and creditors until your debts are paid. Under this rescheduling plan, the debt settlement company provides you with one to three months where you do not have to pay anything at all (although it works to your benefit if you do) so that you can get your finances in order and ready to pay. 

Contact a company, like Century Support Services, for more help.