Debt Negotiation Programs (Also known as Debt Settlement)
Debt negotiation firms were formerly known as Debt Consolidation Companies or Debt Settlement companies. The industry seems to have changed the name because of the bad press some of these companies received.
The goal of reputable debt negotiation firms is to arrange to lower the amount of your unsecured debt.
Debt negotiation differs greatly from Credit Counseling Services and Debt Management Programs. Debt negotiation only attempts to reduce the amount of your debt. There is generally no counseling to help prevent the situation again. If you are looking to negotiate your debt, consider a reputable Credit Counseling Service -- especially one that works for you for free. (For more information, see the document in "To Learn More.")
Since there has been so much abuse in the debt negotiation field, if you do want to work with a debt negotiation firm, choose one with care. Also think carefully before agreeing to stop making payments on your debt while the company negotiates with creditors.