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Debt, the big D. You know how bad it can get. Or do you? Whether you’re a serious overspender, have an emergency that puts you in the red, or your budgeting skills are just seriously lacking, it’s not that hard to get in way over your head.

So what do people do when they’ve gotten in too deep? Some go the bankruptcy route, some consolidate and lots turn to debt counseling nonprofits. A few go with for-profit debt relief services—agencies around just to haggle with your creditors and lower the amount you owe, usually for the hefty price of 15% of your debt or more.

Some of these are legit and some are rip-offs. Plus, the Federal Trade Commission (FTC) just changed the rules about debt services like these. So before going this route, it’s a good idea to score a little free or low-cost advice at The National Foundation for Credit Counseling. Here’s a look at a few of the new FTC rules:

  • Debt negotiation and credit counseling agencies can’t collect cash until they’ve settled or renegotiated at least one of your debts
  • A debt relief agency can require you to set aside savings in a dedicated account to pay creditors (and themselves), but you’ll keep control over the account
  • The agency has to tell you how long it will take, how much it will cost and the negative consequences you might run into

You can check out all of the details for the new laws here.

Bottom line: Keeping down debt is key. If you’re standing on that slippery slope, take a look at what you owe and make a plan for paying it down pronto. And for more on getting out of debt, visit

by Variny Paladino

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