While settlement can work well for unsecured debts, there are entire categories that debt settlement can't touch. Twomeows/Getty Images

When your debts pile up, the idea of settling them for less than you owe can be incredibly appealing. Instead of paying every penny of the balance, enrolling in a debt settlement program lets you work with an expert to negotiate with your creditors for less, and often reduces your balances by 30% to 50% or more . That can provide you with serious relief from your high-rate debt problems, and for many people, it's also a way to escape the cycle of minimum payments and spiraling interest without resorting to bankruptcy.

But while debt settlement can be a great solution for the right borrower, the reality is that it isn't a great solution

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