by D. Hogan

Created on: February 16, 2009

DEBT settlement ads on TV, Radio, and internet are almost all bogus. These ads are generally produced by lead generation companies that sell your information or contact to a third party that actually does the negotiations. Live transfer leads sell for as much as $60. It is a very lucrative business for the lead generation companies.

I would also like to address some comments about DEBT MANAGEMENT. You hear many terms used throughout the DEBT associated service field. Words or titles such as Negotiation, Settlement, Arbitration, Mediation, Elimination, Credit Counseling, ect. These can and do mean many things. As a standard rule lets define three major categories:

1. Debt Management or credit counseling. This is the category that promises to negotiate a payment program for you. Usually out as far as 36 months and sometimes more. This is also the category that finds the worst abuse and most rip offs. The success rate in this category is below 20%. The last figures I accessed showed that 82% of the people who go into a negotiated payment program beyond 6 months, fail to ever complete the program and essentially default back to owing and having to pay the full amount with interest, penalties and possible attorney fees. This is basically true because so many people who are actually bankrupt try to save face, or think they are doing the right thing, get involved with this type of plan even thought they do not have the means or discipline to actually complete the programs. This results in the company offering the service getting paid for your failure. Credit counseling is a designation given mostly to "Non-Profit" organizations that are involved in this. It is important to understand that "Non Profit" doesn't mean free and it doesn't mean legitimate. It simply means that the company divides all of it earnings up between employees and management and shows a limited amount of profit. It is not uncommon for a manager or CEO of one of these companies to make millions through bonus and salary options. There are some simple structural differences but it does not mean they are more trustworthy. This category of companies always charge upfront fees and generally will ask for you to pay them and then they will disperse the funds accordingly. This is the major reason for the fraud and rip-offs that occur within this category. This is so prevalent that most state governments have recently enacted laws dealing specifically with this type of business. The process in this category

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