If you're considering using a debt settlement or debt consolidation service to help you get out of debt quicker and lower your monthly payments, be sure to do your homework before choosing a debt settlement company.

The first thing you should know is that debt settlement, debt negotiation and debt consolidation are not the same thing, which most people don't realize.

Debt settlement companies may charge you an initial "admin fee" of hundreds of dollars simply to set up your account, plus a monthly service fee. Such debt settlement companies take your money every month, but fail to make the monthly payments to your creditors. Instead, they simply put your money in a trust account, negotiate your debts with your creditors, and then make a single payment when there's enough cash in your account to pay a creditor off in full.

Debt settlement companies often don't ask your creditors to stop the interest, over-limit fees, and late fees from accruing. That means your bills will continue to grow while the negotiations are ongoing, so if you're hit with a lawsuit and a judgment is levied against you, you'll owe more money than when you started the debt settlement process!

Most debt settlement companies will claim to be able to settle your debt for about 1/2 of what you actually owe, but this is not always true.

A better way to solve your problems can actually be negotiating with your creditors on your own. Most are practical, and will agree to accept a smaller monthly payment from you and halt all interest and fees fromaccruing. And, of course, you'll save the thousands of dollars in fees that you would pay to a debt settlement company.

Before signing up for any debt settlement service, be sure you check out the company thoroughly. There are some good ones out there, but you have to do your homework. The web is a great place to start. Remember, there are definitely reputable debt settlement companies out there, so you shouldn't make hasty decisions, keep looking for an appropriate firm instead.

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Written by: David C Skul