Before you make any big decisions like hiring a debt settlement company to attempt to settle your debts, it’s important that you understand how it works, what you’re getting into, and the other options you may have. Debt settlement can have a big impact on your personal finances let’s talk about when debt settlement is a smart decision and when perhaps it’s not.

How Debt Settlement Works

The first thing to understand is that debt settlement will generally only work on unsecured debt such as credit cards and other bills that have gone into collections. If you’re behind on your mortgage or car loan, you’re not going to be able to settle because a car can be repossessed and a house can be foreclosed on. Debt settlement also will not work wi...