The best way to settle a debt is to offer the creditor a lump sum payment they will be tempted to take available cash now rather than come up with a new debt repayment plan that you might stop paying accordingly you should contribute monthly into a savings account to build up a lump sum. The debt settlement process involves a creditor and debtor working together to settle on a new debt that is less than the originally owed amount this process differs from debt consolidation in that a new loan is not created rather the loan amount is reduced creditors accept a partial payment of the loan the full amount. Even if you manage to settle your debt in good standing it will remain a fixture on your credit report for seven years if you are not careful and mindful about managing your settlement payments it can remain on your report for even longer so your ability to settle or pay off the amount depends entirely on your financial condition and capabilities share on facebook facebook share on . As a rule you can only settle unsecured debts with a secured debt a piece of real property such as an automobile or a home is promised if the debtor cant finish making payments or defaults on the loan you will not be able to settle these debts as the creditor will simply accept the promised property as the settlement as a matter of fact with a home or auto loan you most likely wont be reading this information your property will just be repossessed or foreclosed on