Debt settlement, debt management, and debt consolidation firms are taking great pains to induce you to call them. They are bombarding the radio and TV with advertising geared towards consumers who are being consumed by credit card debt. They stuff your mailbox with fliers and brochures designed with the desperate in mind. And they flood your email with more ads than Pakistani "Viagra" sellers.

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These firms promise to reduce your credit card debt and help you avoid or clean up your bad credit. The more reputable of these firms are able to accomplish what they promise, but others collect an up front fee for services and leave you in worst shape than you were in before.

The upfront fees for some debt settlement practitioners can exceed 20% of the total outstanding debt! A good bankruptcy lawyer is far less expensive and can accomplish the same sort of negotiation. Furthermore, bankruptcy attorneys are highly-regulated, and any money deposited with them must be escrowed and accounted for, unlike some fly-by-night debt donkeys.

A number of debt settlement, management, and consolidation companies are being sued by the Attorneys General of Illinois and other states. Illinois is crafting regulations to regulate the industry. The SEC is also getting involved, working on regulations that will make it illegal for firms to charge in advance for performing services like mortgage modifications. The new Illinois legislation being proposed will no longer allow debt consolidation companies to charge an up front fee for their services.

Other states, including North Carolina and Montana, have also issued warnings to their residents about debt consolidation companies charging up front fees.

But you don't have to wait for these practices to become illegal, and it shouldn't matter what state you live in. Simply refuse to work with any company that wants your money before performing any services. Or use a lawyer with a good track record. Your local Bar Association should be able to point you in the right direction.