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		Continued from previous page Debt settlement, also called debt negotiation, usually makes promises of being able to reduce your outstanding debt by close to half, including lower monthly charges. That’s a big promise! Why in the world would any lender be willing to give up that much in debt owed? Usually for one simple reason: if a person is talking settlement, they are likely ready to go default on the entire debt. Half recovered is better than none at all. Settlement companies know this and set up programs to take advantage of the need for a middleman to strike the deal. Most settlement programs will usually take a few years to clear your debt in entirety.  Again, your credit report will score very low during the process, but you will have avoided bankruptcy and the debt will eventually be gone. In short, you save money overall and you walk away from the debt.  The snowball approach however, refuses to pay other accounts while putting all your payment ability in one account. There is no settlement involved. Then, when paid, you add that money payment to more of your cash freedom and pay the next account. However, in the meantime you’ve gone delinquent on your accounts stuck waiting. Collection actions and litigation can occur, and your credit report will definitely be trashed. Previous Section - Types of Services Next - How to get it done