Consumer Credit Counseling is a legitimate organization that will not line their pockets with cash while helping you. It will effect your credit, but not as much as a bankruptcy or continuing a non payment situation.

Good Luck!

You can settle the debt yourself and do not need "help" from these companies who might destroy your credit even further and take your money while doing it.

Please consider a local credit counselor:

www.nfcc.org to find one locally.

Gold is right. You can write a letter stating that you want to settle your debt and deliver it directly to them, preferably hand delivered but if that is not possible, use registered mail. You can find how to write your letter online.

I agree that the first step is to contact a credit counseling agency to learn whether you are eligible for a Debt Management Program (DMP). With a DMP, you make one monthly payment to the counseling agency and they pay each of your participating creditors. If you can follow the payment program in a DMP, there will be some effect on your credit, but it will be minor compared to settling your debts.

What you may find, however, is that you owe too much to be able to afford the payment in a DMP. (A DMP will require that you pay all of your debt, plus interest, over five years or less.) If that's the case, then you may want to consider settlement.

I always recommend that consumers who are considering the debt settlement route meet with a bankruptcy attorney first. This is essential for two reasons: if you can wipe out most or all of your debt in a straight Chapter 7, it is probably the way to go. The second reason is that you want a back up plan if you can’t negotiate successfully.

If you find that you are not eligible for a Chapter 7 bankruptcy, and can only file under a Chapter 13 reorganization plan (or that you really aren't a good candidate for bankruptcy, or really don't want to file), then you may consider debt negotiation.

Settlement gets a bad rap for many reasons - some legitimate, others not. I won't get into that whole debate here, but I agree that you should consider this option carefully. While writing my book Reduce Debt Reduce Stress, I interviewed a number of consumers who successfully settled their debts. Some did it on their own, others felt they needed to hire a company to help them deal with aggressive creditors. The idea that no one should ever consider this option is impractical, and leaves many consumers with no option but bankruptcy when they want to pay as much as they can.

With settlement there is NO guarantee you won't be sued! That is one reason why it may be helpful to work with a firm that settles debt, simply because they know which companies tend to be most litigious (and need to take priority), as well as what kinds of deals each settlement company is offering. If you do decide to go it alone, make sure you at least do your research so you get complete documentation of each settlement. I’ll also add that many creditors don’t want to sue, as long as they can work something out with you.

If you decide to work with a settlement company, be careful. I don’t know that this is the forum to name names, so I’ll just provide a few guidelines here. Avoid companies that demand large fees up front. Instead, work with one that will collect the lion’s share of their fee when they successfully settle your debt. Also make sure the company has been around for at least five years, and isn’t just a marketing front that will have someone else do the work. There are a lot of new companies that have sprung up to make a quick buck and may not be around in a couple of years when you are still trying to settle.

FYI, I do not work for any of these agencies so my goal is just to give you objective advice. I hope it helps!

Take Charge America is a great company to manage debt. We signed on with them 4 years ago and are almost debt free because of it.

If you're in a debt settlement program, there are no guarantees you won't be sued by a creditor. Creditors have the right to send debts to third-party collection agencies or law firms in order to collect a debt.

However, most creditors realize that this is a costly and time-consuming approach to resolving debt, and would much rather settle than go through legal channels. The purpose of a lawsuit is generally to force a settlement anyway. Most creditors realize that recovering part of the debt is better than securing no payment at all.

That being said, certain people are at greater risk for being sued during the settlement process than others. For example, if you have a lot of assets or the creditor feels you can pay them, they are more likely to sue. Reputable settlement companies won't work with individuals who are high risk for lawsuits.