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Debt negotiation is, quite simply, a means of renegotiating your debt with your creditor. (Debt negotiation is also commonly called debt settlement.) Such debt can include credit card balances, mortgages, medical and utility bills, liens, even lawsuits and judgments. You can attempt to negotiate the terms and amount of your debt with a creditor yourself, or hire a third party to do so on your behalf.

Creditors may agree to negotiate debt for a number of reasons. If you owe a significant amount of money – or more than you can reasonably be expected to repay – a creditor may agree to a reduced amount and/or more favorable terms. After all, something is better than nothing! With the current mortgage crisis, banks may agree to renegotiate mortgages with homeowners because they’d rather accept a reduced settlement than foreclose on a house that they most likely won’t be able to resell anyway. Debt negotiation can be a win-win for everyone involved.

If you owe a debt that you cannot repay, you have several options to negotiate your debt. You can attempt to negotiate with the creditor yourself. While this is a good place to start, it’s also stressful, time consuming, and not always fruitful. Creditors may offer their own debt negotiation programs, such as credit counseling or independent debt arbitration. Additionally, third party companies may offer to negotiate debt on your behalf – for a fee, of course.

Carefully weigh any fees, hidden or otherwise, when shopping around for a debt negotiation company or program. Also consider where the other party’s loyalties lay; an “independent” arbitrator, for instance, may be hesitant to rule against the person writing his paycheck!

For those in dire financial straits, debt negotiation can be a lifeline. For a secure tomorrow, settle your debt today.