Consumer debt is approaching 900 billion dollars in America. This is not news to the average American who is carrying all this debt. The mortgage housing crisis and potential recession have added more stress to the average family. Collection companies are doing a boom business as a result of the heavy debt load. Bankruptcy filings are on the increase as well.

If you have a large amount of debt the best thing to do is seek assistance of a financial counseling or debt service company. These professional debt management experts will assess your debt and devise a plan to eliminate you debts. In most cases they will require you to cut up all your credit cards and for you to stop borrowing money. This can be tough for many people who have never learned to live within or below their means. However it is a critical step if you are serious about eliminating your debt.

A financial counseling service will also contact all your creditors informing them that you are working to pay off your debts. In addition they will begin to negotiate with these creditors to lower the amount of debt owed. The best debt negotiation companies will be able to save a considerable amount of money. In many cases a creditor will settle for less than 50 percent of the debt owed especially if the debt has been in default for some time. However there are no guarantees as to how much a debt can be reduced. In many cases it will depend on the size and type of debt owed.

Financial service companies charge for their services. In some cases they cost as much as the debt itself. It is always best to discuss the cost of any financial counseling service well in advance of signing any service agreement. The best debt negotiation companies are not always the most expensive. There are many faith based and nonprofit debt counseling services that are excellent at devising a debt recovery plan and reducing your debt. However these companies despite their name still charge a fee for their services. When searching for the best debt negotiating companies you should ask for references. Many companies will respond by saying they cannot do so because of privacy concerns. In most cases this is not a valid excuse.

There are frequent complaints about financial counseling services that charge large fees and do not effectively negotiate down your debt level. These scams take further advantage of people who are already hurting financially. Do not be afraid to negotiate for reduced fees or fees tied to the performance of the counseling service. The best debt negotiating companies will be glad to negotiate with you because they are very successful at debt negotiation.

If you are disciplined and follow you debt elimination plan, stop using consumer credit especially credit cards you can be totally debt free in as little as three years. The best financial service companies will also be the best debt negotiation companies. The better job they do at reducing your debt the less time it will take you to be debt free.