When you try to file for debt settlement, you should understand that not all of your debts would be up for negotiations. Laws and other factors would play into the selection process and would determine which of your debts would be eligible for debt settlement.

To be able to understand which among your debts are eligible you would have to know the difference between unsecured debt and secured debt. This is because only debts which are unsecured are good candidates for debt settlement and negotiations.

Basically, unsecured debts are those that are those that do not have any collateral. They are not backed up by any property which would protect the lender in case you are not able to pay such as in bankruptcy. On the other hand, secured debts are those in which the debtor pledges some asset (usually a car or a house) that would be liquidated once the person is unable to pay off the debts.

Now that you know what unsecured debts are, you would be able to find out which among your debts are eligible. These commonly include money owed from:

• medical bills
• credit cards
• department store cards
• personal and student debts
• bounced checks

Usually, the primary debts that are negotiated are those for credit cards. After all, each swipe of the plastic is a debt to a company or bank which is not secured by any property. These creditors are at risk that you would not be able to pay off your debts and not recovering or earning their money if ever you face some financial difficulties.

As such, you will find that they are much  more willing to settle these unsecured debts as they would be able to at least get a small value in return, instead of totally losing out in their initial investment.