Pros:

   1. Avoid bankruptcy: With debt settlements, you can reduce your debt burden and pay off bills comfortably. You can negotiate with the creditors or collection agency (CA) and settle your debts for as much as you can afford to pay. Thus, you don't need to file Chapter 7 bankruptcy. There are chances of losing your home or car in bankruptcy wherein your assets are sold off to pay your creditors.
   2. Single payment: Instead of paying multiple bills each month, you'll have to make a single monthly payment to the debt settlement company. The monthly payments are accumulated in a trust account in order to be paid off to your creditors/CA after negotiation. So, you can avoid the stress of paying debts at different rates and dealing with several creditors at a time.
   3. Avoid unfair collection practices: You can avoid unfair collection practices and harassment by debt collectors if you negotiate a debt settlement.
   4. Eliminate extra charges: The settlement company can try and eliminate late payment fees, if any. Any over-the-limit fees on credit cards can also be minimized or eliminated through debt settlements.
   5. Avoid lawsuit & other legal actions: Creditors or the CA can file a lawsuit, get a judgment order and garnish your wages or place lien on your property. You may be able to avoid such legal actions if you're in a debt settlement program.

 When you are in a difficult situation due to financial hazards, debt consolidation takes you a long way from the nightmares. Debt Consolidation leads you to a debt free life slowly and steadily, supporting you throughout. It not only solves your debt problems, but also guides you to restore your credit. It gives you a strong financial foothold, which seemed to be an impossible task at one point of time.

The procedure is very simple.

    * Set a monthly amount.
    * Pay all minimum amounts.
    * Pay extra money towards the debt with the highest interest rate.

      This method will ensure that you pay the least amount of interest and repay your debts as soon as possible. The easiest escape for paying the least amount of interest possible is to pay extra dollars towards the loan with the highest interest rate. It is quite obvious that you want that debt to be paid off as soon as you can. This loan is costing you the most each month. Debt consolidation care restructures your total amount and sets a fixed amount to be paid each month. This makes the payment much more affordable and eases your pressures gradually.

      The problem with many people is that they only wish to repay the minimum payments. These minimum payments are configured to keep you paying that high interest rate for as long as possible. The strength behind the fixed total amount for each month is that you will have more money to pay towards another debt, as one debt is paid off. This is commonly known as the "snow-ball" effect. First, determine your ability to pay. If your total payments are more than you can afford, you are in trouble. Next you should make a commitment to stop getting into further debt as this will worsen your financial status.
      You tend to get more vulnerable once you are a hunchback with debts. Avail debt consolidation and give yourself the time to relax, for your worries are now in safe hands.

Paying your bills on time and getting debt free is a great way to get your finances back on track. Given below is a list of 7 steps on how to lead a debt free life.
Step 1 - Admit that you are in debt problems

The first step towards a debt free life is to admit that you are in debt. Leaving bills unpaid and avoiding creditor calls isn't the solution to your debt problems. In fact it makes the situation worse. However, the fact that you're reading this article implies you have already accepted that you are in debt and you're ready to take the next step.
Step 2 - Seek professional help to get debt free

Take professional help from a consolidation or settlement company. If you'd like to obtain lower rates and consolidate your bills into a single monthly payment, then debt consolidation program is the right option for you. But if you wish to reduce the outstanding balance, then you should get enrolled in a settlement program.
Step 3 - Free counseling to help you get debt free

The consolidation/settlement company will offer a no-obligation free counseling session. In this session, a consultant will analyze your financial situation and suggest the right debt solution for you. To make his task easier, you can prepare a list of your debts/bills. Next to each of your dues, put down the name of the creditor, the total amount you owe, the rate of interest and monthly payment. This will give the consultant a better picture of your financial standing.
Step 4 - The consultant prepares a monthly budget for you

Based on the total amount you owe and your monthly income, the consultant will help prepare a monthly budget for your expenses. This is to find out how much you are left with after paying your utility bills and other expenses. The amount left over will be used to pay off your dues.
Step 5 - The consultant negotiates with your creditors

In a consolidation program, the consultant negotiates with the creditors/collection agency in order to lower your rates and monthly payments. However, if you'd like to settle debts, the consultant won't negotiate for lower rates. Rather, he'll talk to your creditors about reducing your outstanding balance.
Step 6 - Start making payments

You need to make a single monthly payment to the consolidation company which distributes the amount amongst your creditors. This goes on for 2-6 years till you get debt free.

In case you choose settlement, you'll have to stop payments to your creditors and make monthly payment to the settlement company. The payments accumulate into lump sum cash after months. The lump sum amount is then paid off to the creditors/collection agency.
Step 7 - Say a big 'No' to any new credit card/loan

While you consolidate or settle debts, make sure you don't apply for any type of credit/loan. Otherwise, it will be difficult for you to get debt free.