The radio and television are full of debt settlement companies pushing their services. That is all fine, but they cannot do anything for you that you cannot do for yourself. And many of them charge high fees as well as a percentage of the amount of the debt that is forgiven. So, the best way to negotiate your debt is on your own.
First of all debt settlement is a negotiation process between you and the lender where the lender agrees to settle your debt for less than what is actually owed on the debt. You must know going into this that settling a debt will ruin your credit, but in many cases it has already been negatively affected by late payments that have already been made on the account. The second thing is you will be accessed income tax on the amount of the debt that is forgiven.
It is as simple as calling your lender and talking to them about your debt. Let them know that there is no way that you ever going to be able to pay your account in full and you would like to settle with them and specify the amount that you are able to pay or would like to settle for. Many companies will only do this after the debt has had a certain number of missed payments. If they are not ready to settle, call them once a month towards the end of the month and do not avoid any call they are making to you.
Once they have agreed to settle and the amount has been agreed upon, you will want to get all the details in writing. Some companies will allow you 3 months to pay the amount off, but many will expect it within 30 days. Ask the lender if they will report the debt paid in full instead of settled for a lesser amount. Many people asked to have the credit history changed. You can ask, but having worked for a credit card company, I don't see that happening.
Make sure that you get all the details of the settlement in writing along with a receipt for your payment and a release of debt. Keep these items in a safe place forever. There is a good chance you will need them again.
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