I work for a credit card company in our collections department, so I have a bit of an inside take on them. They can be useful, but they also have some things that you should know about before you sign up with one of them. (I'm talking about how they affect your credit in Canada, so it'll be different elsewhere). Except for the first point, they're not in any particular order, as you'd want to take them all into consideration with equal weighting.
First, make sure that when you sign up that you know you'll be able to make the monthly payments. An easy way to do this is as follows, the CCS companies we deal with bring the interest on our accounts to 0% (yet again, you need to confirm this with all your creditors to make sure they follow the same procedures) and we accept up to 5 years for payments. For each of your debts, divide by 55 to get the monthly amount that would go to the creditors in proportionately weighted amounts (I recommend using 55 as the number rather than 60 because the contract has to be accepted by all your creditors and if any of them are delayed until your next billing date then using a 60 divide would add more interest and could possibly change the timing enough to be refused by one or all). Take these amounts and add them up, and that would be the amount you'd have to pay each month for the creditors, the CCS fees would be on top of that amount, some might charge a percentage, some might charge a straight fee, but at minimum you'd have to make sure that calculated figure would have to be met, so if that amount is more than you can afford, then there's no point of even going in to the CCS office and you'll have to investigate other options
Second, in our company we only deal with licensed non-profit CCS companies, and we have a list of those that we work with as well, so before you sign up with any CCS, talk to your creditors to make sure they will work with the CCS you will go with. I'd recommend you make a list of a few before you call so that you'll hopefully have one that will work for all of your debts. If you don't know of many, (or even if you do, I can't stress this enough) shop around to see what companies are available for your area. Look online, the phone book, ask your bank, the Better Business Bureau (or equivalent), etc... the more information you have the better equipped you are to make an informed decision on something that you'll have on your file for a few years
Third, keep in mind that signing up with a CCS will put a mark on your Credit Score, so it will stay on your report for a few years after you sign up with them (depending on your country, but 7 is pretty standard). It's not as bad as filing a motion of Bankruptcy or Consumer Proposal, and definitely not as bad as having your account go to a third-party collection agency, but it's something to keep in mind. An earlier suggestion made in this thread was to negotiate a settlement with the company agent, if you can do that, it's good too, but (again, a different company might have different procedures for this, so check with your creditors) with us any settlement gets the account closed and reported to the credit bureaus as a settled account, so it'll be on your record anyways.
Fourth, talk to your creditors to see if they have alternate payment options and how signing up for them in lieu of a CCS will affect your credit rating. A lot of people are under the impression that creditors are just harassing when they make calls, but in (reputable) lending companies, the people working the phone lines are trained in ways to help you pay off your debts in a way that will work for you. It does the creditors no good to have you declare bankruptcy or go to a third party collection agency because they weren't able to form a payment plan that worked around your income and expenses, so they have a vested interest in trying to help you pay off your debts. Even if it's just to ask to move your payment due dates to one that would fit your income schedule, you have nothing to lose by talking, and more often than not it'll help you out greatly.
I know I've gone on for a bit, but I've seen way too many cases where people have got themselves in worse financial trouble than they needed to be because they weren't well informed of their options. I know this has been a theme in my post, but I want to close by stressing again that these are based on the policies and procedures of my company, and a different company might have slightly different P&P's so talking to every one of your creditors is the key to ensuring that whatever steps you take will work without surprises. Hopefully I've given you enough to steer you in the right direction