Debt Elimination

• When the company offers itself as a debt elimination service, this tends to be misleading. Many consumers believe that debt elimination means you will be able to get out of your credit card debts without having to pay them back. While this may be possible in some extreme situations such as debt settlements or bankruptcy, debt elimination companies typically have no more power to reduce or eliminate your debt then you do.
  
  

Debt Settlment

• One way companies offering debt elimination services try to get you to become their customer is by telling you they can settle your debt for pennies on the dollar. Sometimes credit card companies are willing to settle some debts for less than the amount of debt you owe. However, you can negotiate your own debt settlement without the aid of a company that offers debt elimination services, and will likely save yourself a lot of money in the process.
  
  

Payment Plans

• Other debt elimination companies try to get you to enter into a plan whereby the company agrees to give you a loan to pay off your debt. Known as debt consolidation, these companies don't really eliminate any of your debt, they simply shift the burden from your old creditors to the company giving you the loan. Debt elimination companies that "help" you consolidate your debt are simply selling you a new loan, and are doing so because they think they can make money off of you.
  
  

Fees and Impact

• The Federal Trade Commission warns consumers that using any debt settlement or debt elimination company can lead to even more serious financial consequences. These companies often charge high prices for their services, and can leave consumers far worse than they were before. Always carefully research any debt elimination company you're considering. You should also demand that the company provides you with a written fee agreement so you know exactly how much you have to pay, and when.