Debt settlement companies are everywhere these days.
With 57% of Americans' living pay check to paycheck the problem of debt in the US is growing.
The average American household is more the $18,000 in debt, not counting a mortgage.
In fact, discretionary debt in America has now reached 2 trillion.
With so many people looking for a way out of their debt and falling behind in their payments, where should a person to turn for help?  College students with easy access to credit cards, to seniors trying to continue their style of living with all of the losses sustained in their retirement portfolios, to massive job loss in America, the situation continues to worsen.
So how does a person find relief from the escalating interest rates, over limit fees, and the inability to pay predatory lenders? It is not that easy.
One the internet you see claims "cut your debt in half", "slash your payments", "wipe out your debt in 12-36 months", "stop harassment calls from creditors", "improve your credit rating" In reality, even if the creditor settles for half, your total costs will be more due to fees, account charges and taxes.
Is debt settlement the answer?   Debt settlement involves negotiating with a lender on an outstanding balance in an attempt to get them to take less than is owed.
You can try negotiating yourself or deal with a debt settlement company.
  Consider you owe $10,000, and of course to no creditor will negotiate with an account that is not delinquent.
It must be behind in most cases 120 days.
In that time you have racked up late fees and finance charges of about $1200 in that time period.
If they were able to negotiate a settlement you would now have to come up with about $5600.
Add in debt settlement charges, usually 25% which is $1400.
 We also need to remember that Uncle Sam wants his cut, he considers the half you did not pay as taxable income so if you are in the 25% tax bracket you now will pay an additional $1400 in taxes.
So all together, you will pay about $8,400 or about 84% of the original debt.
Not the 50% they promised.
  Now for the hidden costs, delinquency, charge-off and settlement notation will remain on your credit reports for 7 years.
Anyone looking at your credit files, creditors, lenders, employers, or landlords believe that you cannot be trusted to pay your debts and your credit score is definitely low.
  Shady debt settlement companies who offer debt settlement for pennies on the dollar, claim that their system will help you avoid bankruptcy, tell you to stop making payments and communicating with your creditors, require you to make monthly payments to them, claim that they can remove accurate negative information from your credit report should send up a red flag according to the FTC   Individuals working with unscrupulous debt settlement companies were often sued and faced the additional expense of representation adding increased costs to their debt settlement process.
 The emotional toll of these clients, in debt and now faced with increasing legal costs and court fees were burdensome.
Before you consider debt settlement programs, consider other options such as statute of limitations, making arrangements with the lender, creating a budget that will allow you to cut out other areas of spending and put together a new spending plan, or consider credit counseling.
  If you choose credit counseling investigate and do your research.
Make sure they are nonprofit and comply with all federal regulations.