If you are a cash-strapped consumer who is having no luck negotiating with a creditor, debt settlement may be a viable option to consider. The premise behind the debt settlement industry is that these firms can leverage their unique relationships with creditors to induce them to accept a smaller, immediate lump sum in exchange for having the account marked as paid in full. However, there is considerable controversy surrounding the truth of these claims. In recent years, a number of states have passed laws that essentially make for-profit debt settlement firms illegal. In addition, a number of the most prominent credit card companies and financial institutions in the United States have issued company policies that prohibit employees from negotiating with third-party firms. If you opt to take on the debt settlement process on your own behalf, you may have better luck negotiating with your creditors - and save thousands of dollars in monthly payments and service charges in the process.