The point is simply one of organisation - all debt management companies can do is look at what you have an look at options to manage it better - but to be honest, most people can do most of this themselves with planning, organisation, and research. 2c.

In some cases they can get your total debt reduced depending on how much you owe and how much you make. But for the most part Brian is right. Someone who has to call a debt management company obviously cannot manage it themselves so it is a good alternative.

good luck...

If your credit is truly shot, you might be a candidate to at least talk to one of these companies. From what I've seen when looking into this, what they typically do is take your payments, and manage the communications and payments to each creditor. In the process, you fall even further behind and incur even more fees. As you are now demonstrating to creditors that you likely are heading in the direction of bankruptcy, the debt management company uses this as a bargaining chip, and tries to negotiate lower principle, interest, and fees. Keep in mind this is a dangerous game of chicken, and you might end up worse off than when you started, if negotiations don't go your way. I would also guess that if you've got good income and assets, you might be at risk of getting sued.

Brian is correct in that you can negotiate with creditors yourself. Also, you might ask your CC company if they have a program to help consumers that are in too deep. Many do.

There are plenty of documented consumer complaints with this type of company. See ConsumerAction.org for example and search their complaints. Definitely proceed with caution.

The alternative is the good old fashion way... make a budget and start paying off debt. Buy and read Dave Ramsey's Total Money Makeover. I'd also recommend going to DueMinder.com for some free on-line tools to help make a debt reduction plan and stick to it. Your FICO score will start recovering, slowly but surely, as soon as you get back on track and start reducing debt.

With these companies are good and bad you will need to do you homework to find out the good ones a bad one will just make your situation worse. I myself used a excellent settlement company. But you must use caution in choosing like i said its sad that so many companies are taking advantage of people who are in need. The next thing i want to adress is your credit. It will not be as bad as you think. after about a year of me being out of my program, my credit started getting back to normal i was recieving credit offers and such. your credit can be repaired so for now you need to take immediate relief.

I would certainly recommend debt settlement over consolidation. The impact on your credit is a little more negative than with debt management or debt consolidation however it seems to me to be a much better alternative in the long run. Debt settlement is a much more cost and time effective solution. Your debts are paid off in 1 - 3 years for roughly half of your minimum payments you are making now.