Debt settlement involves negotiating with your creditors for settling your debts at a reduced amount. A reduction of 30-60% can be usually achieved from the summed up debt amount. Debt settlement can be performed using different strategies. Debt consolidation is one of the debt settlement strategies, which involves assembling of your debts into one at a lower interest rate. Debt settlement programs allow you to pay small amounts as monthly minimum monthly payment, which will give you time to recover while still erasing your bad credit. These programs enable you to save money over a period of time, which you can use to pay off your debts.