Debt Settlement Companies
You should be very careful about signing up with debt settlement companies. These companies use names like "debt resolution", "credit management" and "debt management". While they may use different names, the general concept is the same. They say that if you give them money they will work out deals with each of your creditors. They will probably tell you that they have relationships with all of the creditors and debt collectors, and that if you pay them a small fee they can work out a better deal for you. Usually, they tell you that you will only need to pay them one lump sum each month, and they will worry about paying your creditors.
The problem these entities and not heavily regulated, and are left to their own devices. Indeed, creditors and debt collectors don't even have to talk to them. So, what has happened in many cases is people make payments to these "debt settlement" companies, who may not be able to work out a deal for the people, all while the interest on a credit card is rising and rising, and a credit report is being destroyed. Also, many of these companies charge huge fees upfront! As a result of massive consumer fraud the Federal Trade Commission issued new regulations that took effect in October 2010.