You won't be caught off guard and you won't feel guilty, because you'll be spending money that you've allocated for the occasion.

Sometimes a creditor is willingto do this as a bargaining point - you give the creditor cash in hand, it gives you a positive listing on your credit report - even though you haven't paid the full amount. Get this agreement in writing.

Don't let the fact that you're spending time getting organized result in late fees on your credit card bills.

You must be sure - and I mean absolutely positive - that you have the willpower to pay off those credit cards and not use them again.

When you default on a secured debt, the creditor takes the asset that backs up that debt. When you convert credit card debt to mortgage debt, you are securing that credit card debt with your home. That's a risky proposition.

In most cases, if you've gotten to this point, you've already received a letter or phone message from your creditor with the name and extension of a representative. If you haven't, you can call the toll-free number on your bill, but keep in mind that the person who answers may not have the power to negotiate a settlement. Ask to speak to someone who is either a supervisor or in the settlement department, if the creditor has one (as many do).

You really don't need to hire a debt settlement company to negotiate with your creditors.