High levels of debt can be stressful and difficult to overcome, especially when you feel as if you have few viable options. Proactive consumers often can negotiate feasible repayment terms with lenders, such as reduced monthly payments or additional time. But when your own actions come up short, you might ask, "How can a debt relief provider help me with debt?"

Third-party debt relief services vary in scope, approach, and integrity. Before choosing a service to help you get out of debt, make sure you understand the differences among the various types of credit counseling and debt negotiation services. Also, make sure you can identify potentially fraudulent debt relief providers, which often ask for payment up front or make promises that sound too good to be true.

Learn more about Debt Relief.

Can a Credit Counseling Agency Help Me With Debt?

Consumer credit counseling agencies typically provide a broad range of different services, including debt management education and direct communication with creditors. Many of them are nonprofit. Look for an agency that is licensed and/or accredited in your state by checking the database of approved credit counseling agencies maintained by the Department of Justice.

Once you find an approved credit counseling agency, make sure to take the following actions:

• Ask individual counselors about their qualifications
• Make sure you clearly understand the services being offered
• Get promises in writing
• Obtain a clear presentation of the fees that you will be charged
• Read the contract before you sign

Ordinarily, the initial meeting with a credit counselor will last at least an hour, with periodic follow-up sessions (if necessary). Agencies may provide money management tips, advise you on how to make a budget, help you develop a personalized plan to get out of debt, and even negotiate lower interest rates or term extensions with your creditors.

See Credit Counseling and Counseling Organizations to learn more.

Can a Debt Negotiation Company Help Me With Debt?

Debt negotiation companies, also referred to as debt settlement companies, may negotiate with your creditors on your behalf to lower the total amount of debt owed, usually for an upfront fee or a percentage of your savings. While the use of these services can hurt your consumer credit score, the Federal Trade Commission (FTC) and consumer advocacy organizations warn that many of these services are not legitimate and have been known to keep the upfront fee without ever actually contacting your creditors.

The FTC, the Better Business Bureau, and other organizations therefore advise consumers to work with approved credit counseling agencies and/or negotiate directly with creditors.

A debt consolidation company is a type of debt settlement service that combines several debts into one, allowing you to pay the company one monthly fee that is lower than what you otherwise would pay. While this may seem like a simplified solution to the weekly or daily barrage of bills, the use of such services often comes with hidden fees and exorbitant interest rates that can make your debt even more expensive in the long term.

Under federal laws, debt relief services must provide you with the following disclosures before you pay any fees:

• How long it will take to meet your debt relief goal
• Whether the service includes a settlement offer to creditors and the date by which settlement offers will be made (or the time it will take to make those offers)
• Debtor's right to cancel the contract within seven days and receive a full refund of any funds (not owed) that are held in an account
• Whether the service changes the terms of your debt obligations, possible negative impact on your credit score, the fact that creditors still may sue you, and the possibility that interest and fees may increase the total amount owed
• Amount of money (or percentage of each debt) that will have to be accrued before the service provider makes an offer to your creditor(s)

How to Spot Debt Relief Scams

Unfortunately, there are quite a few unscrupulous organizations and individuals willing to take advantage of debtors, who too often are willing to believe anyone promising a simple fix. If a debt relief provider automatically promises an easy solution to your problem after you ask, "Can you help me with debt?" then it may not be a reputable company. Here are some of the more common signs of a possible debt relief scam:

• You are asked to pay for services up front, before any services are rendered
• You are not informed of your legal rights
• The company advises you against directly contacting a credit bureau
• The company recommends applying for an Employer Identification Number to use instead of your Social Security Number, in an attempt to invent a new credit report
• The company advises you to dispute everything in your credit report or do something that seems fraudulent

See Avoiding Credit Repair and Credit Counseling Scams for more details.

If you still want to know how a debt relief provider can help you with debt, consider speaking with a bankruptcy attorney in your area.