There are millions of Americans who are either behind on paying their debts or in the debt collection process. Many of these people have abused credit and are suffering from their mistakes. Other debtors have lost their jobs and are not able to pay their previously manageable debt levels. There are a number of companies that are willing to work with credit users who have been unable to make payments and settle their debt for less than what they owe. However, these companies will charge individuals several fees before they are able to settle their entire debt.

One method of debt settlement fees that is commonly used involves calculating a percentage fee based upon the original and/or settled amount of debt. For example, a consumer who settles $10,000 worth of debt for $4,000 could be charged a 20% service fee for the settlement. This fee can either be $2,000 or $800 depending upon the method that is chosen by the debt settlement company. Most companies are not going to advertise this fee up front. Consumers need to ensure that they read the entire contract to ensure that they are being charged fees correctly by the company.

A second method that many debt settlement companies use is to charge a fee after the settlement of each account. This can be a great method for consumers with few accounts being settled. However, some debt settlement companies choose to settle with "easier" companies first when dealing with consumers who have a large amount of delinquent accounts. Debt settlement companies may work with some companies frequently and be able to settle certain accounts quickly. Consumers have to pay a debt settlement fee for each account that is settled or closed. A company may close easy accounts quickly causing a consumer to have to pay several fees fast. Consumers who have a large amount of accounts being settled are better off pursuing the percentage or set fee for debt settlement.

The third method that many debt settlement companies offer is a set price settlement fee. Set fees are difficult to recover if the company is unable to recover the debt or goes out of business. Also, the company may not be as proactive with a set fee that has already been paid to them instead of a percentage fee that they receive after an account is settled.

Debt settlement is often difficult for consumers to handle. There are a number of fee options available so that consumers can choose the best option for them. Do not let debt take over your life, settle your debt today!