THE BLOG
11/13/2013 08:21 pm ET Updated Jan 23, 2014

Why Debt Relief Help Is Broken in America

Being in debt is a terrible situation. You are at your lowest moment in life or darn near close to it. On top of that, you may be experiencing the common side effects debt brings, like depression, hopelessness, feelings of failure or marital strife.

The one point most can agree on is being in debt is not a happy place in your life.

A number of companies exist that claim to be able to help and assist consumers with debt problems. These include the perceived gallant knights of the debt help space, the nonprofit credit counselors, and also include debt settlement companies, debt reduction companies and, more often today, student loan assistance companies.

But there is one common trait each of those groups, including the fluffy credit counselors, has that they won't share with you. And it's a critically important trait you need to know about.

What Debt Relief Companies Won't Tell You

What I'm about to share with you will go against your beliefs, and your knee-jerk reaction will be I'm mistaken. But the sad truth is, I'm not.

You see, debt relief companies have no requirement to put the needs of the consumer first. They have no requirement to act in a fiduciary capacity to help you make the best choices and decisions possible to get out of debt in the smartest way.

That's right. The companies, both for-profit and nonprofit, put their needs before yours and those needs are to maximize their revenue.

If you blindly trust what any debt relief company tells you you may be doing more harm to yourself and sacrificing your financial future. So what can you do about it?

People in debt can be easily manipulated by playing with their emotions. They can be steered into enrolling in debt relief programs that the debt relief companies want to sell. And these programs include credit counseling.

The typical emotional hot button is one of personal responsibility. Companies allow people to continue their belief they have an obligation to see their debt through and make the payments at all costs. And who does this message benefit the most? That's right, the debt relief company. When people bite on this message, it generally results in the consumer enrolling in a multi-year program to deal with their debt.

In general, credit counselors and the other debt relief providers -- like debt settlement companies -- are secretive about one of the most important things to know: their success rate. They remain silent about how well their service delivers the one thing they are selling, to get you out of debt.

Without knowing this critical factor, it's like buying a car without knowing the fuel milage or having surgery without knowing the odds of surviving. It's a really bad way to make an important decision that will impact your wallet or your life.

Debt relief companies almost always fail to educate consumers about the reality of digging out of their situation. Isn't it odd we applaud companies that find themselves in tough spots and reorganize their debts through options like bankruptcy, but we feel bankruptcy for consumers in tough spots is not the right choice? And debt relief companies typically reinforce this errant message.

Making good decisions about getting out of debt involves making smart and informed choices about what is best for you both now and moving forward. One of those informed bits of information is for you to know that when you are talking to a debt relief company, the person you are speaking to is not an impartial adviser but a salesperson. Many are paid with commissions for selling you their product. They do not have your best interest in mind.

If you are facing a tough financial spot, the absolute best advice anyone can tell you is to explore all of your debt help options before you leap to make an emotional choice based on the verbal promises of a salesperson. Talk to a credit counselor, a debt settlement company, and absolutely talk to a consumer bankruptcy attorney. Get the facts from the three major camps before you rush to do anything. And once you've done that, consider using the get out of debt calculator to compare what you heard with the reality of the major options and more to get out of debt.

I want you to make smart choices and just not leap at the first option that comes along. When it comes to getting out of debt the best advice you can hear is "do not assume." Only you can have your best interests in mind.

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