With high gas prices and downturns in the economy and housing market, many families are finding themselves relying on credit cards more often to avoid losing their home due to debt. Unfortunately, many families do not think of the consequences of using the credit cards. Even if the card comes with an introductory low interest rate, often this rate expires in 30, 60, or even 90 days. Many families don’t consider the interest rate at all and cannot understand why their monthly payments increase each month, even when they pay the minimum balance. Debt is causing stress for many good families.

Many debt reduction companies advertise they can erase bad credit off a credit report. These reports are not true. The Fair Credit Reporting Act requires all companies to fairly report bad debt. These companies are looking to scam families, taking their money and further increasing their debt problems.

Still, there are many good companies who offer sincere help with debt management and reduction. These are not easy debt solutions, though. True debt relief requires planning, saving and in most cases credit counseling. Credit counselors have launched massive advertising campaigns as well as bankruptcy laws now require most consumers to undergo some type of credit counseling before they are allowed to file bankruptcy.

To avoid throwing away more money on so-called debt reduction programs, families in financial crisis can turn to their local service agency for a referral. Many local United Way organizations sponsor credit counselors that teach consumers how to get out of debt and budget and manage their money. Many of these credit counselors will also negotiate payment plans with the consumer’s creditors. These negotiations could result in the elimination of late fees and interest payments on the debt. These servicers are confidential so you do not have to be embarrassed to seek help.

If consumers cannot find credit counselors in their local community, many listings are available on the Internet. A good place to start is www.debtadvice.org. This is the website for the National Foundation of Credit Counseling. This website features tools that consumers can immediately begin to use to get a true picture of their financial problem. The site also lists credit counselors by geographic area, so consumers can seek local help.

Backing by the Better Business Bureau is always a sign that a company is credible. The Christian Debt Consolidation website www.christiandebtconsoldiation.com has the backing of the agency. According to the company’s website, more than 11,000 creditors have a relationship with Christian Debt Counseling. The company began operating more than 25 years ago. While each consumer is different, the company says it can help consumers get out of debt in three to five years and negotiate payment plans that save consumers thousands of dollars.

Another resource for consumers with credit problems is www.credit.com. The site was founded by Adam K. Levin, a former director of the New Jersey Division of Consumer Affairs. This website has educational articles on topics ranging from car loans, mortgages and debt reduction. The site addresses consumers at all stages of life—starting out, getting married, buying a house, and retirement, to name a few. It is a one-stop shop for anyone wanting advice about credit, no matter what their credit score is.

Unfortunately, some people cannot avoid having to file bankruptcy to get out of their debt crisis. This should be a last resort after all other options are exhausted. While many bankruptcy attorneys advertise online, it is best to have a local attorney represent you in court. A local attorney is familiar with the local court and bankruptcy trustee, who will oversee the bankruptcy proceeding. Bankruptcy attorneys usually advertise in the yellow pages and many have television advertising as well. Don’t choose an attorney by the biggest advertisement. Interview several attorneys before choosing one.

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