It was of course from some company that was trying to sell a debt management plan. At the time, these were still fairly unusual. The idea was (and still is) that you would turn over all your credit card bills to this company, they would negotiate on your behalf and get you a better deal and lower payments. I remember one such company saying how “we can get the creditors off your back.” Now, you have to remember that all this was back when the economy was booming and the Great Recession was something no one could have imagined would occur. Today, there are thousands upon thousands of debt management companies who offer to help you through debt counselling. They all have the same basic concept behind them, that they will negotiate on your behalf. The trouble is that whenever there are desperate people, con men will move in alongside them and try to steal what little they have. These vultures will basically prey on the weak and try to get you to “sign up” with them, charging upfront fees sometimes as much as $1,000 and promising to take care of everything.

People scrape the money together to pay them, thinking the nightmare is over. But it isn’t. The nightmare is just beginning. These guys will take your sign up fee plus any other money they can milk from you and whistle all the way to the bank. By the time you realize you’ve been ripped off, it’s too late. They’ve closed up shop and moved on to the next mark. So how can you be sure to avoid such scams? It’s really not that hard. Just do what you would do if you were hiring someone for your business. Google them. Put the name of the company into Google together with the word scam and see what comes up. If they’re legit, the name will not get hits for scams. However, if you see people complaining about having been shammed before, watch out. You’re their next mark and you can’t afford to be wrong. This is your life and your credit after-all. No matter how much they sounded sincere, just move on to the next place. There are enough legitimate places to get debt counselling that you don’t need to hire any bogus debt management companies.

These are all creditors, whether it’s the bank, the electric company or the local newspaper, they all want one thing from you: money. There’s just one tiny little wrinkle: You don’t have enough to give them. With near 10% unemployment and hundreds of thousands more underemployed (i.e. working for fewer hours than they want to, or working for far less than they need in order to make an adequate living), more and more of us are falling behind on our debts. However, there is a solution to the nightmare. It’s called a debt management consultant. So what do debt management consultants do?

If you get yourself a reliable debt management consultant, they will do a variety of things to help you with your debt:

• Help you manage your money better. The first thing that a debt management consult should do for you is to help you make and stick to a realistic budget. You lost your job and you’re living on various part time wages? Yeah, it’s tough, but there are solutions to every problem. You’ll need to adjust your lifestyle, but it can be done and your debt management consultant will help you do it.

• Negotiate with your creditors. No, they will not get your debt settled for 35 cents on the dollar. And by the way, if they do tell you they can do that, run like hell – you’ve found yourself a con man. However, they can help you craft a strategy together with your creditors to lower your monthly payments, usually through lower interest rates so that you can try to catch up.

• Counsel you on managing your debt in the future. A quality debt management consultant will help you to manage your debt not only now, but in the future. They will do that by showing you when it pays to use your credit cards and when you’re better off paying cash (hint: buying your groceries on credit is a big no no. That will only sink you deeper and deeper into debt since they’re gone and consumed long before you pay for them).