Debt settlement may be a viable option under certain circumstances.
First, the stage of a collection on the debt. Has the account been turned over to a collection company? Such companies are paid a percentage of what they collect. So they are likely to entertain debt settlement offers. In fact, they often make offers themselves. Similarly, debt buyers purchased the account for a portion of the debt owed. So they too may entertain a settlement offers.
Second, the resources available to fund a settlement. You are more likely to obtain a reduction of the debt if a lump sum payment can be made. The most likely source of such payment is savings, tax refunds, or family assistance.
Third, can you show the creditor it is better off settling than your alternatives? For instance, you may qualify for bankruptcy. But you don’t want to file bankruptcy. The creditor is more likely to settle a debt when faced with a choice between a reduced amount or bankruptcy. Or perhaps your assets are very limited. As a result, the collection of the debt would be difficult and costly for the creditor. So the creditor may agree to reduce the debt to get you into a repayment agreement.