Are you working less hours or maybe even unemployed?  Are you having trouble paying your bills?  You’ve probably heard the TV and radio ads that tell you they can settle your debt for cents on the dollar.  These ads are promoting debt settlement companies, and they are in business to make money for themselves.

Well, I am here to tell you that you need to be cautious.  Let me say it again be cautious.

Paying Fees When You Could Be Paying Off Debt

Debt settlement companies do try to settle your debt for cents on the dollar They may even be successful at it.  But at what cost to you?  Many will require that you pay them a fee up front in addition to a monthly fee to administer your account.  That means you’ve added an additional monthly payment to your budget.

Debt Settlement Damages Your Credit Rating

Choosing debt settlement will damage your credit rating.  If you truly can’t afford your bills, then consider calling each of your creditors to work out an agreement and save your fee money.

It Could Affect Your Tax Return

Lastly, if you are able to reduce the debt you owe, you may have tax consequences come April 15.  The amount you save may be treated as income to you So you may owe income tax.

As your parents told you, if it seems too good to be true, then it probably is If you need this type of service, use a consumer credit counseling service, not debt settlement.  There is a huge difference between the services.  Research your options ahead of time if you are having trouble paying your bills.