Is it too late to start with Debt settlement company?

I think that you don't have to do either at this moment.

IMO you should first send a debt validation letter to the collection agency by the certified mail service and at the same time wait for their response. Remember that every CA has to validate the debt before they can move ahead with the collection process. And between the time of validating the debt every collection effort should cease.

How much do you owe to them?

Yes, you also need to evaluate that whether paying a settlement company would actually worth the amount or not. Otherwise, you'd end up paying more in terms of fees and other charges to the settlement firm.

Check the 'do it yourself' section of the site. You may be able to do the settlement by your own.

You don't need a lawyer unless you are being sued, or are preparing to file bankruptcy. I would be careful about a debt settlement company. The fees can be outrageous, and cost you more in the long run. You can request debt validation within 30 days of receiving the dunning letter. Did the letter have the mini miranda, and the notice that you have 30 days to dispute the debt?
Also, do you have other accounts that are in default? You could contact the law firm and try to work out a payment arrangement with them. If you can afford to offer a settlement, then go ahead. The worst thing they can do is to say no.

DO NOT use debt settlement. This most often will appear negatively on your credit, cost about $10,000 (based on $50,000 debt) and you have NO GUARANTEE your creditors will truly accept the deal. Debt Settlement has really received a horrible reputation.

A much better option would be CREDIT COUNSELING. Careful, many DEBT SETTLEMENT companies like to put CREDIT COUNSELING in their name, just approach with caution.

Also, be sure to check out the Federal Trade Commission website, they have a ton of great information in dealing with your creditors and your rights. You can also look at affordable services like HelpUBuyTime that will help you communicate your position and plan to your creditors that will help get you the time to make it happen. With most credible options you'll still be paying off the debt, they'll just help you with setting up time lines, interest rates, etc... Stay away from people/companies that claim you can just walk away from your LEGAL obligation to your creditors - they're full of crap.

Good Luck,

We just had a case where a client was enrolling in our program with many debts and a summons had been issued to them demanding payment on one of the debts. This debt can not be enrolled in the debt setlement program under this status. The client called the collection agency directly and was able to work out a repayment plan. Now that an agreement has been reached out of court regarding the payment of this debt, the account can now be enrolled in the debt settlement program.

If the creditor/collection agency refuses to negotiate a repayment plan, they will more then likely file a summons requesting a judgement be put in place. If that happens, you would have 2 options. One would be to hire a attorney to represent you at the hearing, which would be very expensive. The second option would be you go to court representing yourself and make a hardship claim to the judge, assuming you do have a hardship. At that point the judge can do do one of 2 things..demand that you pay the account in full through any assets that you have or possibly garnish wages. We have seen however, that when people can make a legitimate claim of hardship, the judge will often instruct the creditor to work out a repayment plan. Once an agreement has been made, the debt can be enrolled in our settlement program and it could be negotiated to a lower amount. In order to make a final determination if the agreement could be enrolled in our debt settlement program, all of the documents would need to be reviewed by our attorneys.