Of the debt relief options available, debt settlement is the only one in which you’ll pay less than the full balance you currently owe. Not only does that save you money, it typically also allows you to resolve your debt more quickly than some other options.

Debt settlement is possible because creditors understand that bad things can happen to good people. A job loss, a divorce, or a medical crisis is not only emotionally devastating but often also results in a financial hardship. If you’ve ever had to rely on credit cards to cover basic expenses — such as food or the electric bill — you know how fast your balances can balloon and how hard it is to get caught up.

Debt settlement is a negotiation process that ends with a creditor agreeing to accept an amount less than the full balance to consider the account paid and to show a zero balance. During negotiations, creditors consider several factors when deciding what to accept. The average settlement we negotiate is about 50%, but offers better than that or not quite as favorable are also possible. The process also includes negotiating payment terms for the settlement, making it affordable to settle your debt.

Although creditors are sometimes willing to settle debts, they are not eager. After all, they would like to collect as much of what they’re owed as possible. Therefore, accounts must meet certain criteria to be eligible for a settlement. Typically, they must be at least 90 days past due and often longer; some creditors require that accounts be past due at least six months. Such accounts are usually charged off, meaning that the creditor has permanently closed the account.

Delinquent accounts will have a negative impact on your credit score, and creditors may take legal action on delinquent accounts. Anyone considering debt settlement should be aware of other consequences of the process. Settled debt may be marked on your credit report as “paid for less than the full balance,” or something similar. Although paying the full balance is best for your credit, paid for less than the full balance is better for your creditworthiness than an unpaid account. You may be required to pay taxes on the forgiven debt; a tax professional can help you determine whether that applies to you.

Debt settlement is not a solution for everyone, but for many people it’s the fastest, most affordable way to get out of debt, get relief from the stress they experience, and begin rebuilding their creditworthiness.