Cost

I would not use a settlement company. It will damage your credit score. Debt consolidation is a better choice. Doing it yourself is even better. Start by paying off the smallest one first and apply that to the next largest and so on

I contacted a couple settlement companies. Both wanted 5% of balance owed as a retainer fee and another 10% as a service fee or whatever. So 15% of balance owed. There was also a $8.35 per month fee to maintain the "savings" account where the monthly withdrawals were kept.

The industry average is 15-20% but some company's charge 10-12% which is very good... But make sure they have a trusted name with the Better Business Bureau before making a decision...

Yes, debt settlements will hurt your credit score, unless it is kablooey already, if you are way behind in payments, or your debt-to-income ratio is shot, even if current on bills. I found when I was researching debt settlement companies a little over a year ago, 15% seems to be the average.

Debt settlement depends entirely on your situation. As frogpatch mentioned, it's true it will hurt your score - but if you're behind on payments or foresee a problem on paying your minimums, other options are no good other than an BK; and BK should be your last resort.

Fees range anywhere from 12-15% of the overall debt. You'll find most companies will offer you a deal of less than 10% if you have the ability to pay off all your debt within 6-8 months.

I used freestar financial to settle my debts. I owed $50k and they settled for $20k. They charged 15% of the $50k which was paid over 16 months included in my payment. Well worth it to pay that as it cut my payment; I paid 0% interet and saved a lot. Now I am debt free and loving it. freestar did me right!