Debt Reduction Debt settlement is a process where negotiations are made on defaulted unsecured debt, to make a one time payment on the balance owed at a much reduced amount than originally was owed. Many folks find themselves saving almost half of what they owe through this process and are debt free within a couple of years. Now this may sound almost too good to be true. Saving half of what you owe and being out of debt in a couple of years. But I assure you it is not; while the benefits are amazing the process is not the most pleasant in the world. In order for any creditor or collector to be willing to negotiate on your balance owed you must default on the accounts. Only by not paying them will they be willing to negotiate a deal with you. The vast majority of debt reduction services are not scams; although there are some flat out scammers around there are not many. The problem lies when a company knowingly puts people onto a program they know will not succeed for that person. A company must also give “full disclosure” meaning they fully explain both the advantages and drawbacks. Unfortunately many companies do not offer full disclosure and taint the debt reduction industries reputation.