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Our economy runs on credit. Credit is simply debt. The average US household with debt has nearly $16,000 in credit card debt and $131,000 of total debt. And, according to Money magazine, the average household debt has jumped 15 percent faster than income over the past dozen years.

Credit is often easy to get, and the amount owed can sneak up on the borrower. According to the financial website, NerdWallet.com, 23 percent of those with credit card debt said theyve been surprised, at least some of the time, by the amount they owe on their bill.

When consumers get in over their heads or income circumstances change, the pressure to repay debt can be overwhelming, both emotionally and financially. People desperate to get out of their circumstances often turn to debt-relief companies, hoping to solve their problems. Unfortunately for many, employing these companies not only doesnt solve the problem, but because of the cost of the plans often in the thousands of dollars things are made dramatically worse.

Basically, there are two types of debt-relief options, Debt Management Plans and Debt Settlement.

Typically, in a Debt Management Plan, a counselor tailors a plan for the consumer to pay off debt. Often creditors will reduce interest rates or waive some fees as a part of the plan. Instead of a consumer paying the creditor directly, they send a payment to the debt management company, which in turn uses the money to pay bills under the plan. If the decision is made to use a DMP, here are a few things to consider:

Use a reputable, accredited nonprofit credit counseling agency. The agency should belong to the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. The agency should also be accredited by the Council on Accreditation of Services for Families and Children or the International Organization of Standardization.

Make sure the monthly payment is made.

Get everything in writing, including the fees.

Make sure the payments are being made to creditors monthly. Confirm with the creditor that they have approved the DMP.

Of the two options, hiring a Debt Settlement company is riskier. These companies often require debtors to deposit money into a designated bank account, often for a long time, before they settle debts. They may promise a creditor will agree to a settlement. However, the creditor is under no obligation, so theres no guarantee. There can even be negative tax consequences, depending on the debtors financial condition. The IRS could rule savings obtained by the Debt Settlement service as income and therefore taxable.

If the decision is made to use a Debt Settlement company, proceed with an abundance of caution and get the following answers:

The price and terms of their service.

Check with the Better Business Bureau to see if there are complaints against the company and how the company responded.

Check to see if there are any lawsuits or government actions against the company.

How long will the negotiation process take?

How much of the outstanding debt do you have to save before the company makes an offer to your creditors on your behalf?

What are the negatives of not making direct payments to creditors?

Also, before signing with a Debt Settlement company, talk with a lawyer. It may be possible to hire an attorney for less than the cost to enlist a Debt Settlement company.

Finally, debtors should consider negotiating with creditors or debt collectors themselves to come up with a manageable payment plan. Every dollar not paid to someone else is money that could be paid to creditors.

Make sure you do your homework before signing any paperwork.