You hear a lot of ads these days for debt settlement companies, but they rarely refer to themselves as such. They are very popular right now and I am not sure if that is good or bad. If they get you out of debt, I guess you would have to call it a good thing. But many times that is not the case. From what I can see, these companies can be quite deceptive. If they have been in business for several years, there is a good chance they are reliable. But many of these companies have sprung up in recent years just to make a quick buck.

If you develop a structured plan for settling your debts, it can work out for you. I don't recommend using a debt settlement service. Many people pay every month into an escrow account and do not complete the plan. They lose all the money and are farther behind than they were before. You can settle your debts without a service and eliminate the fees that they charge.

The two big disadvantages and you will never hear them in an ad is that your credit will be trashed, for paying less than what is owed on an account and you will have to pay income tax on the amount of debt that is forgiven. This may not sound like much, but if you have $10,000 reduced from your credit cards the government is probably going to want about $2,000 in taxes. Chances are if you did not have it to give to the credit card companies, you will not have it to give to the government.

If you need help with your debt, starting out with a consumer credit counseling company is the best option. There is no obligation to use them and they will take the time to answer your questions and advise you. Your unsecured debts will be consolidated and you will only be making one payment each month. You will be debt free in 3 to 5 years with no substantial damage to your credit. Prepare for the future by getting a quote for debt freedom today!