I am constantly hearing horror stories about how people looking for debt relief are being misled and given bad advice about their debt relief debt review options. It is ridiculous that the people who need the most help get treated the worst. Some people would rather suffer in their debt than seek the help they need. This is largely due to companies that are unethical and only interested in taking your money or that they have bought into false information about these programs. We’re going to clear the air and debunk the myths about debt as well as arm you with the information you need become debt free.Why things are the way they are?Words like morels, ethics and honesty no longer carry the weight they once did. Human nature is such that when an opportunity arises to make a quick buck people will do anything to get their slice of the yummy greedy pie. These scam artists are smart too! They know that when people are desperate they make poor decisions. I’m not going to dive too deep into the psychology of it but you need to know what drives and motivates these people if you want to avoid them. In nature it’s the week and the young that are the easiest prey while the strong survive. The same basic concepts apply to the predators and prey of life; if you want to survive in today’s jungle you need you need to be prepared.Knowledge is powerIt’s time to attend the SCHOOL OF DEBT. First things first let’s cover the three available programs and the various names they go by.1. Debt Settlement also referred to as Debt Negotiation or Debt Arbitration.2. Debt Management also referred to as Consumer Credit Counseling, Credit Counseling, CCCS, Consumer Credit Counseling Service, Debt Management Plan or DMP.3. Debt Consolidation Loan – Any loan that consolidates your debt.As you can see there are really only a few methods or programs but numerous name variations. This can be confusing at times. Another commonly used and frequently misunderstood word is “debt consolidation”. Consolidation is not a program type. It is a word that has a very broad meaning. Technically, all three relief programs can be considered a form of consolidation in one way or another. So remove this word from your vocabulary for now. And I’ve purposely left out Bankruptcy as an option because the goal here is to avoid it.Debt Settlement and what you need to knowOut of the three programs Debt Settlement saves you the most money but has a negative impact on your credit rating. It’s a good fit for someone who already has bad credit or cannot qualify for a less aggressive program. Keep in mind that if you have good credit now but can’t pay your bills then you’re credit scores are going to drop anyway so you may want to consider this as an option and worry about your credit rating at a later time. Also, know that you’re good credit isn’t doing anything for you right now. The whole point of having good credit is to prove your ability to payback what you borrow and borrowing more money isn’t an option if you can’t pay your bills. Anyone can enroll in a settlement program so even if you can afford to make your payments it still might be a program to consider due to the fact that it will save you a ton. You just need to determine which is more important for you having a few years of bad credit and eliminating your debt or continue paying the minimum payment for the next 26 years wasting thousands in interest. If you’re the type of person that strongly believes in paying back every penny that you owe I think that’s great and I completely respect your opinion. Personally I see nothing wrong with paying less than you owe to your creditors because they’re the biggest crooks out there. I could write a novel justifying why I believe this but that is another topic for another time. If you want to get a feel for how crooked the banks are then rent “Maxed Out” the documentary. I think everyone should watch it whether in debt or not. When enrolled in a settlement program you stop making payments to your creditors and start making payments into a trust account. The funds that accumulate in this account are then used as leverage to negotiate your balances down with your creditors. You can typically expect to see a savings of 50% of the original balance. You need to know that your creditors are not paid until a settlement is actually accepted. That can take months even years and it really depends on what you can afford to pay towards the program each month. The more you pay the faster the funds accumulate and the faster you get out. Settlement gets a lot of undeserved bad press. Just the other day I was watching “Your Money” on CNN and some guy was ranting about how creditors are not obligated to settle for less than what you owe. This is misleading because your debt gets passed onto a collections company who then settles for a lesser amount. The banks are regulated by the federal government to clear bad debt from their books when it reaches 120 days delinquent. That bad debt is then traded on the secondary market just like stocks. Collection companies buy these bad debts in large pools for as little as 15 cents on the dollar. Being in collections actually works to your advantage because they’ve bought your debts for far less than your original balance enabling them to accept a smaller amount while still making money. I have never once seen or heard of a credit card where the balance could not be reduced through a settlement. Typically you can include any unsecured debt into the program with the exception of student loans, payday advance loans, military credit cards and personal loans from American General, Beneficial and City Bank. Do not enroll in a settlement program if you owe less than $7,000 because once you factor in the cost of the program and any charges incurred there’s no benefit.10 reasons why you should use a debt settlement companyThis is for the people that think they can negotiate their debt without the help of a debt settlement company. I hear this all the time and the fact is you’re going to save more money, time and effort if you use the services of a good debt settlement company. Some people get all worked up about this and I don’t get it at all. Never assume you know something…get the facts. Trust me on this one…you’ll thank me later.