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          Have you ever heard this commercial “we can eliminate your debt?” No one can just eliminate you debt; they can help you get control over it. Do not confuse Debt Settlement Companies (DSC) with true Credit Counseling Groups (CCG).  I advise you do research on the company that you choose to work with. You will see the difference between the two.

 DSC will always ask you to pay and upfront fee. Which is usually a large amount that you cannot afford at this point? They tell you all you have to do is pay them every month and they will take care of everything. False! What these companies actually do is they take your money that you pay monthly and hold on to it. They offer your creditors a portion of it and whoever takes it first gets the pot. Majority of credit companies do not work debt settlement companies. If a company has a settlement available why would they need a middle man to negotiate for them? The DSC actually waits until the account goes in to charge-off. Charge off is when the creditor sales off your credit to a third party collection agency. This is not a good thing. This actually hurts your credit. They also tell not to be in contact with your creditors.   

CCG are the opposite, they are actually non-profit groups. Their programs last about five years with a minimum payment that you can afford on a monthly basis. Also with those minimum payments they adjust your interest rate to 9.9 percent. They negotiate with your creditors by sending out proposal that can either accepted or declined but they will work for you until they come to an agreement. This type of program also helps you preserve your credit if you have decided on a CCG; your creditor will accept the information from you and forward it over to the proper department to handle until they receive the proposal from the CCG. CCG information can be found in your local yellow pages as well through the United Way.

I also suggest that you contact your creditors. Explain to them your situation whether you have been out of work, have new medical bills, or just became over extended. Majority of companies have programs that are designed to help you out.

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