Despite all the hype, the truth is that most people have no need of these services and do not realize just how much one of those agencies can add to their already mounting debt. Most of these agencies are not in fact a debt solution but rather a part of the debt problem.

While some people may find these services helpful it is important to remember that no matter what hype, smoke and mirrors they use to hook you in, they will soon be asking you for more money. Usually those fees are a substantial percentage of your existing debt. Maybe they will save you money BUT if you pay them a third of your debt then in the long run you are not saving much -- if any at all. Of course, it is reassuring to have a person or organization to hide behind when the creditors start circling, but the truth is that the majority of the services they provide you can do just as easily for yourself -- and you will not have to pay anyone a dime. And you do have consumer protection laws to protect your from too aggressive collectors. In addition, most companies are willing to work with you if you are trying to find a way to pay them.

Only in a few cases will you actually need a third-party to negotiate for you and then you may be able to work with a local attorney for a substantially smaller fee than you will have to pay to one of those high-priced debt-reduction companies. In fact, some credit card and finance companies refuse to deal with anyone other than the debtor so you could end up paying someone else and then still have to do the work yourself.

There are nonprofit agencies that exist to help you and if you find it too difficult to go it alone then you might consider giving one of those a try, but look very closely before you sign any agreements to make sure it truly is a nonprofit agency. Some are for-profits skillfully marketed with friendly, nonthreatening names.

In the long run, I would suggest you do not hire a company but rather work on your own to reduce your debt. Not only will it be less expensive but you will also learn important lessons about how to handle your money in the future.