Warning

• Always check into the reputation of a debt settlement company before signing up, especially if they will be administering monthly payments on your behalf. Some companies have been accused of mishandling customer payments, thus causing more credit damage to the client.
  
  

Pro--Time Frame

• Debt settlement companies can usually negotiate quickly with your unsecured creditors, and many repayment plans can be finished in 3 years or less. This of course depends on the amount of money owed and what can be paid toward these debts at once or each month.
  
  

Pro--Minimize Credit Report Damage

• Debt settlement does cause some credit damage, though likely not as seriously as filing bankruptcy. Some accounts will be noted as "settled" and "closed by credit grantor," and many accounts will show that you had to undergo credit counseling.
  
  

Con--Monthly Fees

• If you are part of a monthly payment debt settlement program, you may be charged around $20 a month as of 2009 depending on the company and your debt plan. In small debts, it may be better to add this money yourself toward repayment.
  
  

Con--Signup Fees

• Most debt settlement programs require $100 or less upfront to enroll as of 2009. Again, with smaller debt loads it may be better to use this money toward the debt repayment and try to negotiate with creditors yourself.