Maybe Debt Settlement is the best option in my case

Most of the reputed debt settlement companies are able to cut the total by 40% to 60% of the outstanding balance depending upon the individual situation. You need to talk with different companies and compare the options. Your accounts need to be in default for few months before the settlement company starts sending the proposals to your creditors. All of them will ask to deposit the money in the escrow account created for the program. This includes their fees of the program. I heard Superior debt relief and forgetadebt to be good ones. Know about this program thoroughly before you get started with any settlement company. It is your money and it must go in safe hands.

Ok...my two cents...

No, I don't see any creditor settling for that low of an amount. If they sue you, the judgement would hang around for years, and they would have plenty of leverage to collect by, and quite likely, would end up recieving a good deal more than the 25% you wish to offer them.

You might consider dealing with them directly, and trying to lower your interest rates, perhaps removing other fees as well, or signing up with a consolidation service. The threat of bankruptcy, may give you some leverage in negotiating, but I still think the likelihood of a creditor settling for 25% is very, very slim.

I don't know that I could come up with it, but for arguments sake. What is likelyhood of 50% settlement with a lump sum payment. (my point being, trying to avoid the huge $$$$ going to settlement company rather than paying off my debt, even though I understand I would still come out ahead)

Nothing is guaranteed, but that is a lot better. You might have some room to negotiate with if you start talking bankruptcy, and/or mention you have troubles coming, but a lump sum to pay off one or two lucky creditors, if they'll settle. Do make sure you are proactive and forward with your creditors, that does go a long way. It's ultimately going to depend on just how flexible each creditor is, some are more lenient and forgiving than others.

What are the advantages and disadvantages of debt settlement? It seems a good solution for me but will it affect my credit history if I needed to have an auto loan later.

debt settlement sounds like it has helped many here. My experience wasn't so good, but perhaps I chose the wrong company. In any case...if you chose to go down this path, talk to a lot of companies. In talking with others, the amount they claim they can settle for, is often too low, and they may come back and tell you they need more money later. Just my 2 cents.

Are there any debt settlement companies to stay clear of?