 TITLE: Debt Relief: An Essential Guide CONTENT: What Are the Risks Associated With Debt Relief?\n-----------------------------------------------\nWhile there are some significant benefits of using certain debt relief methods to eliminate your debt, there are some potentially major drawbacks that may cause you to rethink your options:\n*   If you choose debt consolidation, some consolidation loans charge origination fees and most balance transfer credit cards charge balance transfer fees. These fees can limit the value of consolidation, though you can still save hundreds of dollars on interest despite them.\n*   There is no guarantee that your interest rate will be lower with debt consolidation or a debt management plan.\n*   There's no guarantee that a debt settlement company can negotiate a lower payment with your creditors. And even if it does, the process is likely to severely damage your credit.\n*   Credit counseling agencies and debt settlement companies typically charge fees for their services. While credit counseling agencies are typically much less expensive—a small upfront fee and an average of roughly $30 per month versus 15% to 25% of the settled amount with debt settlement firms—it's still a charge you'll need to consider with your plans.\n*   With debt settlement, the difference between what you owe and what you settle for may be considered taxable income. You may also open yourself up to lawsuits from your creditors because you've stopped making payments.\n*   Scammers may use the hope of debt relief through counseling and debt settlement to take advantage of you.\nAs you consider whether debt relief is right for you, consider how these potential drawbacks could affect you. In some cases, they may be better than the current situation, but they could also make things worse. END