The debt relief industry has both credible and shady debt management companies.  Yes, there are debt settlement companies that engage in fraudulent, deceptive and abusive practices that pose a risk to consumers, according to a federal investigation of the industry. In its investigation, the U.S. Government Accountability Office found that some debt settlement companies provided fraudulent, deceptive, or questionable information to its consumers, such as claiming unusually high success rates for their programs – as high as 100 %. However, the Federal Trade Commission and state investigations have typically found that less than 10% of consumers successfully complete these debt settlement programs.

According to the Federal Trade Commission, if a company promises to erase your debt for pennies on the dollar, be skeptical. Debt negotiation can be risky, and it can have serious, long-term consequences for your credit report and your ability to get credit in the future. And if another company include credit repair, alarm bells should go off.

Here are six tips from the Consumer Federation of America on how to get real debt relief:

1. Try to resolve your debt issues with your creditors one on one. You may be in a position to able to get your credit card interest rate reduced, late charges forgiven, and your monthly payments reduced.

2. Contact a nonprofit credit counseling service for advice. It may be possible to work out a plan through the credit counseling service to pay off the debts over time. To find the nearest nonprofit credit counseling services, consumers can contact the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

3. Know your rights. Ask your Attorney General’s Office if state law limits the amount or timing of debt settlement fees in your state. Find your state AG at

4. Read the fine print. Walk away if the contract doesn’t contain the promises that were made to you, or if the contract contradicts what you were told.

5. Look for services that charge a fee only after the service actually negotiates debts.

6. Take immediate action if you can’t make your home loan or auto payments. (In some cases, debt settlement services can’t address home mortgage or secured auto loans.) Contact your lender to discuss loan modification options. immediately to try to work out new payment arrangements.

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