If you're having trouble paying your credit card bills, you may have the upper hand with some of your credit card companies. Many banks have been through the ringer since the economy hit the skids, and unless you've been living under a rock, you know that many of these banks had to take bailout money from the federal government.

The banks are ready to put the bailout nightmare behind them and want to get bad debt off their books. They are ready to work with some of their customers who haven't been able to pay their credit card bills. In many instances, they are willing to take $.50 or less on the dollar. If you owe $10,000, this means you could end up paying only $5,000 or less.

As with any great deal, there are a few caveats and catches.

1. You'll pay taxes on the forgiven amount. Say the bank writes off that $5,000 of debt. You'll receive a 1099 form at the end of the year and you'll have to report the forgiven amount as income. Still much less than the original debt, but you'll need to be prepared.

2. Your credit will take a hit. The bank will report to the credit reporting agencies that you paid off the account for less than the owed amount.

3. You'll probably have to come up with a fairly large amount up front. If the bank is willing to settle for half of what you owe, they don't want to wait another two years to get their money. On a $5,000 settlement, they may want several thousand dollars up front, or split it up into five $1,000 payments spread over five months.

Consult with a credit counselor to discuss your individual situation, and be sure to ask about debt settlement and negotiation.