"Debt Relief" Firms: Help or Hinderance?

October 14, 2008 Wall Street Journal
Debt-Relief Firms Attract Complaints

Some of the highlights:

(1) A lot of firms charge hefty up-front fees of between 10% - 15% of the total debt outstanding, which can mean consumers have to pay thousands of dollars to these firms before they will start performing any work.

(2) A lot of credit card companies, such as American Express, will not work with any debt relief company.

(3) A debt relief company's instruction to their customer to stop paying their creditors often leave the customer worse off, in the form of bad credit, higher interest rates, late fees, and creditors filing a law suit to collect their money.