For those who have a considerable amount of debt and are facing difficulty in meeting payments, you have a good alternative known as debt settlement. Debt settlement allows you to avoid having to declare bankruptcy. In addition, it assists in rebuilding your credit in a brief span of time. A debt settlement is comprised of a lender settling the debt for fifty to sixty per cent of the initial amount. This not only benefits the debtor, but the lender as well. For example, if the debtor declares bankruptcy, the lender does not receive any money. In the case of debt settlement, the lender recceives at least some money. Thus, the lender is more than willing to make a debt settlement and stands to make some profit while making a debt settlement. When compared with consumer credit counseling plans, debt settlement offers more debt reduction in a short time. Additionally, there is the option of bankruptcy - although it should be the last alternative. In bankruptcy cases, the debtor is assisted by credit arbitration experts, lenders, financial advisors, and lawyers. This process encompasses debt settlements and negotiating terms in cases of financial issues such as: judgments, litigation, bad contracts, leases (restaurant, office, equipment), loans on repossessed cars, lawyer’s fees, credit cards, unsecured loans, medical bills, etc. Debt negotiation or debt settlement is the process in which the debtor establishes contact with the creditors and both of them agree to a lump sum paid instead of the regular debt payments. Sometimes it is found that the debtor is lagging behind in the repayment of the debt. In such a case, the debtor can obtain a letter from the creditor in which the amount of debt settlement has been mentioned. This amount is about half the balance amount to be repaid. The sole condition is that half of this balance amount be paid fully within a specific time frame of 10 or 20 days. There are two alternatives in carrying out this procedure. First: hire an arbitrator or a professional debt negotiator. Second: perform this procedure directly.