With the economy struggling over the past few years, there has been a drastic rise in debt consolidation companies. There has been a lot of bad press about debt consolidation companies due to lawsuits dealing with their "non-profit" status. One company even had a federal lawsuit filed on them because they filed chapter 11 bankruptcy, but they didn't really go bankrupt. Instead, they formed many small companies.



Some companies have changed their names to get away from the negative press caused by the lawsuits. If you hear about "debt negotiation companies" or "debt settlement companies", they are the same thing as debt consolidation companies, but they are using illegal tactics. You should avoid these companies.

If you want to find out if a company is reputable, you can check with your local consumer protection agency and/or with the Better Business Bureau where the company is located. Even a company with a good rating may not actually be good though, so beware. If a complaint is considered resolved, it does not count against a company. Even if a company resolves an issue though, it still adds a lot of hassles for the consumer. The Better Business Bureau doesn't have the authority to investigate complaints dealing with debt consolidation companies, so the information is incomplete.

One general piece of advice that you should stick to is to avoid any debt consolidation companies that have registered addresses in Maryland or Florida. Maryland and Florida do not have any regulations for these companies. There are plenty of other organizations in other states for you to choose from, so you can easily eliminate the potential for problems by avoiding unregulated companies.

There are numerous websites that you can go to in order to read customer reviews for debt consolidation companies. Customer satisfaction is one of the most important aspects of this service, so it is definitely worth researching. If a company seems to give a lot of people problems, it should definitely be avoided. Most likely, no company will be perfect, but the companies that have very few negative remarks about them and lots of positive remarks about them should be regarded highly.

Often times the smaller companies have better customer service and affordable plans for debt consolidation since they have less customers to deal with. Also, they need to leave a good impression on people so word of mouth advertising spreads. They rely on this for future business.