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.

If you are able to settle, you'll be getting off rather easy. Debt settlement companies can sometimes get you off the hook for a large percentage of your debt - in many cases, up to 50% will be written off.

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.

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

Rolling all of your debts into a single loan is a good idea - in theory. In fact, it can be a great idea.

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

Most people don't know this, but if you settle a debt for less than the amount you owed, you are potentially responsible for taxes on the forgiven debt. Look at it this way: You received goods and services for the full amount of debt, but you're only paying for a portion of it - sometimes less than 50%. Anything more than $600 is generally considered taxable, but the IRS will sometimes waive the tax if you can prove that your assets were less than your liabilities when the debt was settled.