More than ever, being in debt is seen as a common problem most Americans are facing. Wouldn't you like the creditors to leave you alone? How about relieving some of the stress that comes with knowing you are in debt? Debt settlement is a solution that can ease your financial pain.

Maybe you have heard of the term "debt settlement" but you aren't exactly sure what it means. Let me explain a little to you and how the process works.It is actually very easy to understand. This is a process where your outstanding debt is negotiated down to a smaller percentage, and that is what you pay.

By paying only a portion of what you originally owe, makes you feel better because you are that much closer to becoming debt free. And it makes the creditors happy because they have gotten a payment!

The way that debt settlement works, is you put aside an amount of money into a settlement account. You would actually not make any payments to your lenders; you would be saving your money. When you reach a specific amount then you would start the negotiation process. More often times than not, they will agree to a lesser payment for two reasons.

The first is if you have been late on your payments they are already nervous they won't see a dime. The second is they know bankruptcy is an option and if you file, they really won't get a payment. So by agreeing to the negotiation process, they are settling, you are saving and everyone wins. If you are fortunate enough, you will be able to get the balances negotiated down anywhere from 45-60% of your original balance.

Let me be clear on why the lenders will agree to this. As I mentioned above, they are concerned that you might find bankruptcy as an appealing option! That leaves them with nothing, so by settling your debt this is like protecting their investment. If you are in a bad spot with your finances, they know that they risk getting any form of payment from you. If they see you are willing to give them a portion of it in full, most times they will agree to take it.

This is a process you can do alone, but I honestly wouldn't advise it. You are stressed out enough as it is with your bad credit and being in debt. There are many reputable debt settlement companies that you can work with! Just don't wait any longer, because your creditors will eventually turn you over to a collection agency. Once it's gone that far, the collectors will be relentless. The last thing you want is a lawsuit involved, just think about attorney fees.

Legitimate debt settlement companies know just how to go in and negotiate on your behalf for prime results. They are the experts here and usually will have a relationship with the credit companies. Do some research online and with the BBB (Better Business Bureau) so you can find a company that will negotiate for you.

Of course there are pros and cons when it comes to the debt settlement process. Yes, it does show up on your credit report that you filed, but keep in mind this is still better than bankruptcy!

As for the fees that are involved, make sure you pay them after they have settled your debts. Be aware of a company that asks your for a large fee in the beginning and monthly payments.

Keep yourself informed and very active in the process. This is YOUR finances at stake here. Let them do their job, but make sure you do yours. Keep track of everything and also request copies of your credit report after to make sure that all three credit bureaus have updated information.

Good luck and know that you are not alone in this. Yet, no one other than yourself can make you take the first step towards debt settlement. Get started today and you will be on your way to living debt free!