Are you a self-confessed shopaholic who buys anything and everything that you get your shopping addicted hands on? Such thoughtless and impulsive buying will most likely result in the accumulation of a bunch of junk that will simply collect dust. Can you even remember that silk scarf you just had to have and since it was a virtual steal at 50% off you just had to buy it? Where is it now and how many times have you actually worn it? Is it still fashionable?



If you're like most people, chances are you'll have to rummage through bins and bins of collected shopping "litter" which you've accumulated through the years, just to be able to see that once precious scarf. You may still be in a state of denial by saying "Fashion goes round and round and that scarf will have its shining moment once again."

Unfortunately, many people fall into this mode of impulsive buying that they really can't afford and before they realize it they become saddled with debt. If you fall into this category, you'll soon need to learn a thing or two about debt settlement which can assist you in extracting yourself out of that self-imposed state of financial trauma and begin to start rebuilding your life bit by bit. And the time to start is now! Of course, you have to be honest with yourself, admit that you've got a serious debt problem and then humble yourself enough to seek the help you need to pull yourself out of this devastating ordeal.

First things first, a lot of people may actually think that they only have a few choices when it comes to solving their debt problems. The two most common options for those who are burdened with enormous amounts of debt are either to consider declaring bankruptcy or debt consolidation. Unfortunately, if you take the easy way out by declaring bankruptcy, it will leave an embarrassing and indelible mark on your credit report for up to 7 years, which will result in higher interest rates, less credit and if you try do qualify for a mortgage (some lenders do give loans immediately after bankruptcy) you will most likely not be able to get a loan to cover 100% of the financing you need. Normally, an 80% first mortgage and if you can get a second mortgage, it will be at much higher interest rate and probably only 10% of the loan value for a total of 90% of the loan to value and you'll have to come up with 10% down.

Clearly, everything will come with a higher price for a period of time but you'll have to weigh that with a straight debt consolidation solution in which you pay off your debt. However, in many cases you can negotiate with the collection agency and it's realistic to get 25% - 50% of the debt forgiven, if you can show that you'll continue to make monthly payments until the remainder is paid off.

Many of the debt settlement / debt consolidation companies were actually established by the credit card companies themselves. Why, you ask... because it only makes sense for the credit card companies to help you pay off your debt because they can either forgive some of the debt or reduce the interest rates, lower the monthly minimum payment requirements or some combination and get paid a portion of the money owed or receive nothing if you declare bankruptcy. What would you do if you were in their shoes? The answer is obvious. This is why a lot of people who have been saddled with debt are now being offered debt settlement. Of course, not all debt consolidation service companies are owned by credit card companies but many are.

Some groups offer debt settlement programs through arbitration. The "selling point" when it comes to these kinds of solutions is that debt settlement will actually help end your debt problems, without having to go through declaring bankruptcy, without having to pay overcharged debt consolidation program fees as well as helping you avoid getting caught in the debt consolidation trap that a lot of people have fallen victim to.

In many cases, what the organizations do that offer debt settlement services is negotiate your debt down with the collection agencies that have been given your case. I would encourage you to contact a number of companies to ensure you feel comfortable and that you are working with a quality company that doesn't over-charge you for their services.

On the other hand, if you would really like to save money, which only makes sense since you are already heavily in debt... then negotiate with the collection agency yourself. It's not difficult, rather than getting upset when you get called night after night simply tell the collection agency rep that you would like to pay off your debt but you can only do it if you can get it reduced and then ask them that you would like to get the debt you owe reduced by 50% - 60%, even 75% and ask them to see what they can do. Ask for a lot up front because as in any negotiation there's always a give and take. Believe me, they will go to work for you and your offer will be seriously considered because they only get paid when they collect and it's better to get their percentage on a smaller amount than "diddly squat" on the full amount.

Of course, you'll have to decide what route you want to take... bankruptcy versus debt settlement but shop around and realize that you do have options. The internet is full of companies offering their bankruptcy or debt settlement services, but be careful and don't let them push you around and never work with anyone you don't feel 100 percent comfortable with.