When people refer to settling debts through negotiation, it is almost always unsecured debt settlement that they are speaking about. Quite simply this is due to the fact that secured debts (debts that are "secured" by an asset) are very difficult to negotiate settlements on, because ultimately the creditor can seize the asset as payment. Therefore, it is unlikely that a creditor would agree to settle a debt for less than the value of the asset it is secured by.
With unsecured debts however, the creditor has no such recourse. The only recourse these creditors have is to sue you for the amount owed, and if successful, try and collect on the judgment. But because this process is somewhat costly, takes time and offers no guarantee that they will ever collect on the judgment, many creditors are therefore open to a debt settlement offer.
No. And for good reason. First, once you start dealing with secured debts the legalities are more complicated. Second, because it is very difficult to negotiate significant discounts on secured debts, there is simply not enough money being saved to pay for this type of service.
Unsecured debt settlement is not a given, and creditors typically will not consider even beginning to negotiate a debt settlement until you are 6 months behind in payments. In other words, if you are current with your debt payments, and have the means to continue to make those payments, it will be very difficult to negotiate a settlement with your creditors. Keep in mind that choosing to settle your debts is typically only an option for folks who would otherwise have to declare chapter 13 bankruptcy. It is not an appropriate option for those people who have unsecured debts but simply don't want to pay them off in full.
Although secured debt settlement is far less common than unsecured debt settlement, it does happen. And basically it comes down to dollars and cents. Even when a debt is secured by an asset, there are costs involved in obtaining that asset as payment for the debt. And once the asset is obtained, there are also costs and uncertainties involved in liquidating it in order to get cash. Therefore, if you were to offer your creditor a sum of money less than the full amount of the debt, but more than what they felt they would end up with after taking all the costs into consideration, you may have some success.
They may also consider settling the secured debt for less if they
know for a fact that the underlying asset has lost value and is now
worth considerably less than the outstanding debt.
No. Although many people do choose to ultimately hire a professional to negotiate their unsecured debts on their behalf, you can certainly opt to handle your own negotiations. And with the typical debt settlement fee charged by a professional equal to 15% of your outstanding debts, the "DIY" route of settling your debts is certainly something to consider.