If you are no longer able to make your minimum monthly payments to your creditors and need to settle debt, there are a number of debt settlement strategies you can employ. Debt settlement is the legal process of reducing a debt significantly through negotiations with creditors. Consumers who have over $10,000 in unsecured debt like credit card bills and medical bills are eligible to apply for debt settlement.

The first thing to keep in mind in order to settle debt is the interest rate you are paying on your debt. When you sign up for a credit card, you will be told what the interest rate is. This interest rate usually rises if your credit gets worse, for example if you are late with, or miss, a monthly payment. When the government announces a lower interest rate, however, you can approach the credit agency and demand they lower the interest rate on your debt. This will lower your monthly payments and perhaps even help you avoid the longer negotiations of a debt settlement. Bear in mind, however, that interest rates usually increase and creditors are reluctant to reduce them. If you do your homework and keep track of the current interest rates so your monthly payments remain or become affordable, you can even avoid the need to settle debt.

In the event that you cannot avoid a debt settlement, the simplest strategy is to apply for debt consolidation. Debt consolidation is the legal process of rolling all your debts into one lump sum for which you take out a loan with a loan consolidation company. You can then use this money to settle debt with all your other creditors. This form of debt settlement has the advantage that you only have to deal with one creditor. It’s important to remain up-to-date with the current interest rates and ask for adjustments when possible.

If you don’t qualify for debt consolidation, a legal debt settlement is the next option to settle debt. You will have to negotiate with each of your separate creditors in order to settle debt by reducing the balance and constructing a realistic payment plan. This is a timely and complicated procedure which most people find highly stressful. It is to be advised to retain the services of a reputable debt settlement attorney in order to settle debt quickly and efficiently. A debt settlement attorney is used to dealing with large credit companies and understands the negotiation process necessary to settle debt. Furthermore, a debt settlement attorney will represent you in all communications with your creditors, and thanks to his or her knowledge of federal and state debt settlement law, will know how to best protect your consumer rights.