If you are, consolidating at a lower interest rate can help you pay off your debt faster. But if there's even a small chance that you'll spiral back into debt, it's not for you.

The Bankruptcy Reform Act of 2005 made it harder for individuals to file bankruptcy, which is always the last resort. Unfortunately, simultaneously consumers racked up so much debt that counseling companies - which are higher up on my list if you need help managing your debt - are sometimes unable to help. So if you fall into this camp, debt settlement may be something to consider.

If you have even a smidgen of doubt that you'll be able to stay away from racking up additional debt, don't do it.

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.

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).

Unless you have multiple accounts that you need to negotiate and you think the project is just too big to tackle on your own, you're better off just calling your creditors directly.

The interest rate you receive, however, is contingent on your credit score.