Add the New York Times to people telling you to watch out for debt settlement companies. David Streitfeld wrote this article about what to look out for. The key sentence “More often, they say, a settlement company collects a large fee, often 15 percent of the total debt, and accomplishes little or nothing on the consumer’s behalf.”
This is a great article about the pitfalls. I have had 5 calls in the last two weeks from people who used these companies and were looking for salvation. Unfortunately, the debt settlement company took the money and did nothing. Absolutely nothing. The folks were sued and ended up needing to hire an attorney to defend the lawsuit and still negotiate a settlement.
If you are in debt, and you think you need help, talk to an attorney. Avoid the debt settlement companies. Even when they say they are “not for profit” they will still take 15 percent to more of your money and do nothing for you.