Debt settlement works as follow; you sign a contract with your debt settlement company authorizing them to represent with your creditor or debt collection agency, and agree on their fees. They gather information about your current financial status. They attempt to settle your debt for 30-70% of your outstanding balance. Once your creditor accepts the settlement amount they expect to receive the settlement amount within few days. It is very rare that you can get your creditor to accept monthly postdate checks for the settled amount.