apushatayid – you absolutely can do this yourself. maybe an experienced firm can get you a better deal than you can get on your own, I don’t know. However beware of scammers. There are many of them around, unfortunately even heimish frum ones who will literally take your money and run. They prey on people who naively trust anyone heimish. I learned that the hard way. I don’t know anything about the one mentioned by the OP though. The fact that they have an actual office is probably a good sign.
TheChevra –
1. negative repercussion is that your credit rating will be shot for a few years so if you were planning on buying a house or need a car loan fuggetaboutit.
2. if you are not insolvent – see my post above. In that case you could end up with a huge tax bill.
3. you need to come up with lots of cash during a short period of time. Suppose you have 100K and settle at 20% as an example, you’d need to come up wth 20K quickly.
side point – if you cant come up with the cash to settle, some banks will let you close the account and make minimum payments until the balance is paidf in full – with very low interest and no fees. they figure its better for them to get back all their money that way rather than take a loss. They will only do this if you haven’t made a payment in 4-5 months though. Don’t wait longer than that because once it goes to an outside collection agency you wont get such a deal.