Settling your debts...

You might have seen ads for companies that say they can reduce your debt – sometimes for cents on the dollar. All you have to do is pay them. But these offers are not always what they seem.

Before you jump into any kind of debt reduction program, do some homework first. It’s a good idea to find a reputable credit counselor to talk over your options – and know that debt relief companies can’t charge you before they actually settle or reduce your debt. If they try to charge you, walk away.

Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in consumer credit, money and debt management, and budgeting. They discuss your entire financial situation with you, and help you develop a personalized plan to deal with your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.

A reputable credit counseling agency should send you free information about itself and the services it provides without requiring you to provide any details about your situation.

Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate non-profit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.