“The debt settlement field is filled with scam artists who charge huge upfront fees and then fail to settle any debts.” – Liz Pulliam Weston, the author of “Your Credit Score: Your Money and What’s at Stake“

If you’ve encountered such companies that offering such debt settlement solutions – avoid it because it’s a scam!

According to Los Angeles Times, Weston says “The debt settlement field is filled with scam artists who charge huge upfront fees and then fail to settle any debts.” In fact, many debt settlement companies are getting bad press in the media after many of their clients filed complaints against them. It is because many ended up paying off more credit card debt than usual – refer to debt settlement scams.

Here’s some Weston’s advice when are struggling to pay off your huge credit card debt load:

1. Make an appointment with a legitimate credit counselor

Firstly, you have to allow a legitimate credit counselor to review your current financial situation to find out whether you’re eligible for a debt management plan – a five-year-plus low-interest rate plan that enables you to pay off your credit card debt on a regular basis. Weston suggested that you should find a counselor who is affiliated with the National Foundation for Credit Counseling – start finding a credit counseling now here.

2. Make an appointment with a bankruptcy attorney – when bankruptcy is your last resort

When there’s no other way to solve your credit card debt problems, you have to consult a bankrupt attorney to see whether filing for bankruptcy is the best option to eliminate your debt or a ideal way to avoid being sued by the creditors.

3. Start seeking reputable settlement companies when credit counseling and bankruptcy are not your best options

If both credit counseling and bankruptcy don’t really suit you – you can refer to a bankruptcy attorney for some recommendations of legitimate debt settlement companies that may be able to help you paying off debt effectively.

Here are some alternatives for your kind reference:

Alternative 1: Look for friendly loan

When you are facing financial difficulties and it is hard for you to apply for secured personal loan or debt consolidation loan, looking for friendly loan from family members, relatives, friends or current employer is recommended. You can gather the fund from them and pay them back in future with or without interest. You can save your time and effort to apply loan from financial institutions.

Alternative 2: Negotiate with your creditors to reduce partial of your debt

If there is no friendly loan available, don’t feel upset. You can negotiate with your lenders to reduce your total debt. Contact your creditors or write in to them to request for help. Inform them about your current financial position and prove to them that you can only pay back partial of your total outstanding balance. You are advised to offer them a reasonable settlement amount or propose a lower interest rate to them.

By doing so, you are able to reduce some financial burden and make your debt more “affordable”. If you have no confidence to handle the debt issue on your own, you are advised to look for a reliable debt settlement company to assist you. The professional will be able to deal with your creditors on your behalf.

Alternative 3: Look for government approved credit card debt counseling agency

If your credit card debt is unbearable and the amount is too large for you to handle on your own, you may want to declare bankruptcy. Before you take such action, you are advised to look for government approved credit card debt counseling agency for help. The representative will advise and assist you to set up a plan which suits your situation. You are reminded not to file bankruptcy before consulting anyone.

Alternative 4: Work out your own payback plan with your personal stimulus package

If you don’t wish to affect your credit rating at all, I would strongly suggest you to create your own economic stimulus package to raise cash for your debt. Be a smart tax payer. Make use of your tax refund to pay partial of your debt. At the same time, sell off things that are valuable so that you can eliminate your debt first.

Besides, look for part time job to increase your monthly income. Take the initiative to work out a realistic budget and find as many ways as possible to raise cash to clear off your debt.

When you don’t own any fixed asset, don’t worry and don’t try to avoid yourself from your creditors. Even if you fall behind on payment, you still stand a very high chance to get rid of your credit card debt by choosing one of the alternatives stated above. Just one thing you need to bear in mind. You must evaluate your financial requirements first before making up your mind on the financial option.

In general, the US government does not provide any direct counseling services for individuals. However, the government assists the citizens from other way. The consumers can obtain a list of government approved credit counseling agencies from the website of the US trustee’s office.

These agencies are responsible to provide professional assistance to people in need. You can approach the approved consultants through face to face counseling sessions, over the phone or even online.

Let’s take a closer look on how this service can help you.

What is the main purpose of getting credit counseling?

When you have accumulated a large sum of outstanding balances on your credit card statements and you have lost your financial ability to pay back, you are advised to seek for the services of credit counseling. The credit counselors will work with your creditors to reduce your debts as well as the interest rates. At the same time, as a debtor, you will be equipped with some efficient debt management skills so that you will not be trapped in the next debt cycle.

When do you need the service?

You will only need this specific service if you are planning to file either Chapter 7 or Chapter 13 bankruptcy. If you plan to go for debt settlement, you are not required to obtain such counseling. If you haven’t made up your mind which financial solution you are going to take up, you can consult any representative from the agency to obtain second opinion. The duration of consultation is usually one hour.

What are the privileges of getting government-approved credit counseling agencies?

As there are many debt management companies in the market, you may not be sure which providers are genuine and which are scams. In order to avoid yourself from unethical providers, the most ideal place for you to refer is through credit counseling agencies that have been approved by the federal governments. The channel will enable you to obtain guaranteed legitimate services and you can overcome your debt problems legally.

Last but not the least; obtaining assistance from the government-approved credit counseling agencies to overcome your credit card debt issue is less costly. Although you still need to come out with certain cost to pay for the services provided by the non profit organizations, the cost incurred is much lower than the fees charged by commercial organizations.

Moreover, if you are suffering from severe financial hardship, you might be eligible to have the fee waived. In conclusion, obtaining government assistance is always the best.

Consumer credit counseling program is one of the popular financial solutions among the Americans. A good debt restructuring program not only helps to overcome debt issues, but also plays an important role in developing constructive financial habits that prevent people from getting into deeper debt.

However, not every credit counseling program is created equally good to eliminate credit card debt. The question here is how to get a good program? I hereby would like to share some useful tips with you.

# Tip No.1

For people who have no idea about this specific debt restructuring program, the good place to obtain recommendation is through your local banks. Besides bank, you may search online to look for some reputable service providers. You are advised to identity at least 4 viable service providers for comparison purpose.

# Tip No.2

You need to act as a smart consumer. Make sure that you ask the RIGHT questions in order to obtain the accurate information. Most of the standard services provided under the debt repayment programs are more or less the same.

The differences lie on the support services. You are encouraged to ask more about the educational and motivational resources the companies can provide. It is important to evaluate the programs by looking into their value added services in detailed. It will be ideal if you could get all the necessary information in written form.

# Tip No.3

Before finalizing your selection, it is important for you to find out what type of counseling involved and how much work is done. In general, a good program must include the service of a professional counselor and a detailed guidance on “personalized” budget planning. You need to make sure that systematic establishment and administration are in place so that your credit card debt can be eliminated successfully.

# Tip No.4

In order to make better decision, you are advised to do thorough comparison. If possible, spend some time and put in your effort to set up a comparison chart. You can either write down all types of services provided by different providers on the paper or you can use excel sheet. By doing so, you are able to see a clearer picture on all sorts of services.

# Tip No. 5

When you approach the service providers personally, you are reminded to get the details of how the program works. You need to verify whether the program suits your financial needs or not. At the same time, find out the cost of the program. Do not commit yourself if you can’t afford to pay the fee.

# Tip No. 6

You are reminded to ask the service provider whether your credit score is maintained. It is important to ensure that your credit rating is not harmed by this financial solution.

To sum up, a good program is able to get you out of debt, prevent you from debt and offer you consistent consultation from time to time. Hence, apply the tips above to enjoy true debt relief.