 TITLE: How Do Debt Relief Companies Work? CONTENT: Debt Settlement Alternatives\n----------------------------\nThe alternatives to debt settlement will almost always save you money and help you avoid doing long-term damage to your credit as compared with turning to a debt relief company.\n*   **Debt consolidation loan**: As noted above, debt consolidation loans shift high interest debt to lower interest debt. If you qualify, a debt consolidation loan can be a highly effective way to lower long-term borrowing costs and get high interest debt such as sizable credit card balances under control.\n*   **Balance transfer credit card**: A potentially less expensive but somewhat riskier version of debt consolidation for those with good credit involves using a balance transfer credit card. This allows you to move debt from one or more high interest credit card accounts to a lower interest card account, such as one with a 0% introductory annual percentage rate (APR) on balance transfers. The fees and interest charges you could face if you don't pay off your balance transfer within the introductory period make this trickier than a simple debt consolidation loan, but it may be a good option for you.\n*   **Debt management programs**: Debt management programs may sound a lot like debt relief companies, but their approach, cost and potential benefits differ greatly. Debt management programs are provided by nonprofit organizations dedicated to assisting individuals in financial trouble. Debt management organizations provide credit counselors who can help you organize your budget and take control of your debts. Credit counselors, such as those certified by the National Foundation for Credit Counseling, may work with your creditors to come up with interest rate reductions or extended repayment schedules that can help you pay your debts in full without compromising your credit.  \n    If your income and other financial circumstances make it infeasible to pay even renegotiated debts, certified credit counselors can steer you toward filing for bankruptcy and help guide you through the process.\n*   **Bankruptcy**: If all other strategies fail, bankruptcy may be the only resort for overwhelming debts. Aside from the credit consequences—it can make it impossible for you to borrow money for years—bankruptcy can be emotionally difficult. It may be no worse than the stress of constant calls and letters from bill collectors, however, and it can allow for the eventual rebuilding of your credit and borrowing power. END