Typically, you can do Debt Consolidation *BEFORE* you get into too much trouble with your creditors. It is a way of reducing your multiple monthly payments into a single lower payment. The objective is to get your monthly budget more manageable. Debt consolidation only works though if you do not incur any new or additional debt after you complete the consolidation.

Debt Settlements are agreements (typicall entered into at some point after the debtor has defaulted on payment) with a creditor or the collection agency representing a creditor where the creditor agrees to accept an amount lower than the stated debt. While this seems like a good deal for the debtor, it has and can have many drawbacks.
Often the creditor and or collection agency have tacked on a significant sum to the original debt, so much so that even the discounted amount may be more than you originally owed at default. While it is legal for the creditor and/or collection agency to add interest, fees, and penalties, some of these additions can be quite high (in some cases they may even exceed the legal maximums). Further, if the agreement is to begin a payment schedule, the interest, fees and penalties may continue to accrue (often making it impossible for the debtor to ever pay off the debt). Don't forget that the dollar amount of the "discount" must be reported as taxable income by the debtor.
If entering into a debt settlement agreement , be sure to have everything in writing and be more than sure you understand everything you are agreeing to.
While many debt collection agencies are honest and sincere in helping you resolve your debt problem, some are not and can make things much worse.
Be careful out there.

Try going to: http://www.tascsite.org and looking up some companies.
A good blog I read: http://iclosem.wordpress.com has some great articles on debt settlement. I would definitely look into that.

I was listening to the Howard Stern show the other day and it looks like KC armstrong just signed up for debt settlement with this company called Envision Debt Solutions (www.envisiondebtsolutions.com). I ended up sending my sister there as they answered all my questions right. They have an 8% retainer fee (since they're an attorney based company) and all the contracts you sign are with the attorneys. They were actually very courteous and professional and guided my sister through the whole process. Give them a call at: 800-515-9603

now for debt management compaines, these companies are a little different, they will usualy produce a financial assesment for yourself (the card holder) also known as an income and expenditure report. they will then decide how much you can pay to each creditor each month, they send the details to all your creditors and then if your offer is accepted you usualy get the interest and charges frozen on your credit card, and are allowed to pay back a lower ammount than usual for a fixed period of time.
one thing i will say is read your contract through very closely, as some debt management companies (such as gregory pennington ) actually wait 3 months before paying any of your creditors, even though you will be paying them money every month to sent to the creditors (and to pay for thier service) this pushes you further into arrears, and has caused some people to be issued default notices, the company do this to both earn interest on the money in thier holding accounts, but also to pro;long the ammount of time you will need thier services. in my job i only ever recomend FREE debt management compaines such as payplan, the CCCS (consumer credit counceling service) and your local CAB (citizens advice bureau) all of these comapines provide equal or better service than those you would pay for. hope this helps you out.

Get yourself a written budget, where everything you make next month is spent on paper this month.

Nobody gets a dime until the essentials are paid for:
Food, shelter, utilites, transportation.

Then see what you can cut. Food = Beans & Rice. No restaruants, no steaks, etc.

———————————————-

To quote from Dave Ramsey's web site:

History also teaches us that debt wasn't always a way of life. In fact, three of the biggest lenders today were founded by people who hated debt. Sears now makes more money on credit than on the sale of merchandise. They are not a store; they are a lender with some stuff out front. However, in 1910 the Sears catalog stated, "Buying on Credit is Folly." J. C. Penney department stores make millions annually on their plastic, but their founder was nicknamed James "Cash" Penney because he detested the use of debt.

Henry Ford thought debt was a lazy man's method to purchase items, and his philosophy was so ingrained in Ford Motor Company that Ford didn't offer financing until 10 years after General Motors did. Now, of course, Ford Motor credit is one of the most profitable of Ford Motor's operations. The old school saw the folly of debt; the new school saw the opportunity to take advantage of the consumer with debt. "