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Instead of paying a company to talk to creditors on your behalf, you can try to settle your debt yourself. If your debts are overdue the creditor may be willing to negotiate with you. They might even agree to accept less than what you owe.

Using debt settlement options to reduce debt comes with several risks, including late payments on your credit report, potential charge-offs, settlement company fees, tax implications on forgiven balances, possible scams and the overall risk of settlement offers not working.

Check if you can get a Debt Relief Order (DRO) If you get a DRO, you won't pay anything towards the debts in the order for 12 months. At the end of the 12 months you'll no longer owe those debts. While the DRO is in place your creditors can't ask you to pay any debts included in it or start any action against you.

The bottom line Deciding if debt relief is worth it depends on your financial situation and should generally only be considered if you've exhausted your other options, experts say. If you do proceed with a debt settlement company, it's critical that you work with a reputable firm.

It is always better to pay off your debt in full if possible. While settling an account won't damage your credit as much as not paying at all, a status of "settled" on your credit report is still considered negative.

Bottom line. Debt relief companies work to settle your debts, reducing the total amount you owe. But in addition to a large fee, their services can come with risks, including credit damage, a large tax bill, and even potential lawsuits.