Services Overview

The Bottom Line Comparison: Who to Trust

You've taken the first step towards getting out of debt by acknowledging that you need help. The next step is figuring out whom you can trust. Before you sign your name on the dotted line, check out this helpful overview of debt management companies.

Debt Consolidation

You're probably familiar with those big companies who advertise through TV commercials, radio spots, infomercials, Internet banner ads, etc. Thanks to huge marketing budgets, these companies are able to pull in large numbers of people. The problem is you may end up getting treated more like a number than a person! What's more, these companies generally promise a "quick fix" (which it may or may not be), and most are not affiliated with the NFCC (National Foundation for Credit Counseling). Plus, many of the debt consolidators have a for-profit business hidden behind a non-profit credit counseling company. The credit counseling facades are used to filter clients to the for-profit arms, such as a sub-prime lender.

THE QUESTION IS...Isn't your hard-earned cash better spent repaying your debt than on splashy marketing campaigns? Click here for more

Credit Card Companies

It's ironic. Credit card companies are notorious for helping people get into debt. And now, they want to help you out of it! Many have big, new in-house collection departments which may negotiate with you by offering deferred payments or other options. They are not in the business of caring about "the big picture" you face financially. Their business is making sure they get their money.

THE QUESTION IS...Should you trust the same company who got you into to debt to help you get out of it?

Other Credit Counseling Organizations

They use the Internet to appeal to your sense of desperation and need for immediate debt relief. You send in your money. You never hear from them again. Unfortunately, this happens. That's because the debt management industry is highly unregulated on both federal and state levels. And over half of the states do not require any sort of business license or special "counselor" qualifications. This means anyone can do it and charge whatever they want! This is why it's so important to ask about your credit counseling agency's accreditations and double-check its affiliation with the NFCC.

THE QUESTION IS...Will your credit counseling agency-and your money-still be around tomorrow?

Settlement Attorneys

Whereas credit counseling organizations offer to negotiate reduced interest rates and re-aging of accounts with creditors, settlement attorneys offer to negotiate with their client's creditors to reduce the principle balances of their accounts. In their advertising, they state that a person's credit report will suffer if he or she goes on a Debt Management Plan offered by a credit counseling agency. What they fail to mention is that the creditors may or may not choose to mark a credit report with a note that a client is on a DMP. Even if a creditor does choose to mark a credit report with a note regarding a DMP, this normally has no effect on the client's overall credit score. Furthermore, settlement attorneys rarely mention the fact that a creditor is highly likely to mark a credit report adversely if they are forced to reduce the principle balance to avoid taking a complete loss.

THE QUESTION IS...When dealing with settlement attorneys, are they telling you the truth or just plain double-talk?

Bankruptcy Attorneys

Bankruptcy attorneys vary from settlement attorneys in that they offer to completely eliminate most, if not all, of a client's debt. This sounds like a great idea until you consider the massive effect on your credit report. Bankruptcies remain on a credit report for 7 to 10 years, depending on which chapter is filed. And most creditors are unwilling to offer you any kind of credit until the bankruptcy is removed from the report.

THE QUESTION IS...Is it worth it? Or can you repay your debt without taking this final step?