Debt settlement is a service that reduces a person's debts by negotiating settlements with the creditors.Debt settlement programs provide clients with a single payment every month. That payment does not get disbursed to the creditors every month but instead goes directly into a special purpose savings account.The consumer has full control over this savings account, but the settlement company can also monitor it. One by one, each debt gets negotiated down and settled for a fraction of the balance. When it's time to pay the creditor a lump sum payoff (i.e., the settlement amount), the client must agree to the settlement first. After the client agrees, the funds are released from the client's special purpose savings account and paid directly to the creditor.On average, within 24-48 months, all debts will get settled and resolved through a debt settlement program. Also included in the special purpose savings account are the company's fees. Every time a debt gets settled and paid, at that point, the debt settlement company also earns its fee.