So, you're struggling with debt and thinking about using debt settlement. But you've heard lots of stories that debt settlement can ruin your credit, and you're not sure who to believe. Sound familiar?

Well, you're not alone. Because your see and hear ads all the time for debt settlement promising to help you get out of debt faster. While debt settlement can be a legitimate solution - it is not nearly that simple!

So before you sign up with a debt settlement company, ask yourself the following 3 questions. They'll help you decide whether or not it is the right solution for you, and will help you avoid getting ripped off!

1. Do you know exactly how debt settlement works?

It's NOT as simple as having some credit card bills, paying less, and getting out of debt in a few months. It can take several months to see results. Requires a lump sum payment (some companies help you save up the money, others require the lump sum directly from you). And can get pretty stressful before a settlement is reached.

2. Are you already behind in your payments?

In order to gain the leverage needed to get your creditors to accept a settlement, you must be behind in your payments. If you're already behind, then settling may be the right option for you. If not, you'll need to stop paying (and risk phone calls from your creditors and risk lowering your credit score).

3. Have you researched the company you want to hire?

Like any industry, there are good settlement companies, and there are bad ones. The good ones will help you understand the process and answer all your questions. The bad ones will try to sign you up quickly, take your money, tell you nothing about how the process works, then force you to wait while the do their thing. So do some research, contact the Better Business Bureau, and ask for references.

So before you sign up with a debt settlement company, make sure you know exactly what you are getting yourself into!

Kris Bickell is he founder of Debt-Tips.com, which offers helpful tips on how debt settlement works and other debt reduction tips.