If you have credit card debt so high you can't make monthly payments on all your obligations, debt settlement could be your way out. But you're not likely to see or hear that in any newspaper or TV stories on the topic.
Journalists feel your pain, but they don't appear to understand it. After sampling the torrent of news accounts regularly published on the topic, it seems they may not want to. If any did, they might make an effort to actually talk with someone in the debt settlement business.
Is Research a Forgotten Word in Newsrooms? Full disclosure: I'm in the debt settlement business, have been for years. But this isn't about me, it's about you and vital information that could help you get out of debt - if only it got reported. Credit card debt is causing serious problems, and we need better reporting about all possible solutions.
I have yet to see mention of a good settlement company in a news article, and there are plenty of them. But it appears journalists have their minds made up before they begin.
Two recent articles in national publications illustrate my point, one by an Associated Press reporter and one in USA Today. I'll get to those in a minute, but first let's consider some basic facts that any good debt settlement specialist would tell you when discussing credit card debt or other unsecured debt.
Debt settlement:
* is not for everyone - in general, it is for people with more than $10,000 in unsecured debt who have encountered a hardship such as divorce, job loss or medical bills that makes it impossible to keep up with their financial obligations;
* plays an important and legitimate role in helping these people slash credit card debt and get back control their lives;
* has steadily gained acceptance since 2005, when new laws made Chapter 7 bankruptcy all but impossible for most people; and
* gets fewer Better Business Bureau complaints than a popular alternative, credit counseling, and successfully resolves a higher percentage of them.
Are there bad companies? Of course there are, but some journalists seem to think "bad" is the only kind. Let's get to specifics.
Important Information Missing from Associated Press Story
A recent article by Candice Choi, of the Associated Press, has run in online and offline publications nationwide. It is typical of the current run of articles - incomplete and only partially sourced.
Choi attributed no thoughts or quotes to anyone in the debt settlement industry she was writing about. Instead, she quoted extensively an executive of the National Foundation for Credit Counseling, and provided a link to the NFCC Website. The debt counseling industry, starting with NFCC, was established by banks and credit card companies. Its purpose is legitimate and important. But does anyone think an organization founded and supported by banking interests will put its stamp of approval on a legitimate and highly effective alternative approach to reducing credit card debt? Don't hold your breath.
There was no mention of The Association of Settlement Companies (TASC), the professional association for the debt settlement industry. Perhaps Choi attempted to contact TASC, perhaps not. Had she done so and failed to get a response, it seems she would have mentioned that in her story.
Half the Way with USA Today
A July 21, 2009 article in USA Today by Sandra Block gets only slightly higher marks, and offers incomplete help to people with high credit card debt. She used one quote nominally favorable to the debt settlement industry:
"For some borrowers with large debts that can't be repaid within three to five years, a reputable debt settlement company may offer an alternative to bankruptcy, says Gerri Detweiler, credit adviser for Credit.com, a consumer site."
That would have been more impressive had Block not previously likened our industry to a "weight-loss product that causes you to gain 10 pounds."
For additional information on resolving credit card debt, Block referred readers to debtadvice.org and the Website of the Association of Independent Consumer Credit Counseling Agencies. She made no mention of TASC, much less provide a link to that organization's Website.
Block pointed out four "red flags/warning signs" to look out for if a person might be considering debt settlement. All four were valid points that helped make her story about the problem of credit card debt accurate, but not entirely true.
Red Flag, Green Flag
Block's article would have been more informative had she raised a few "green flags" to point out characteristics of good companies. Had she and Choi done more complete research, they might have found some positive attributes, such as these.
Reputable debt settlement companies:
* explain the advantages and disadvantages up front, stating plainly that debt settlement is not for everyone;
* keep the client involved in every settlement decision, instead of deciding for the client the order in which debts will be settled;
* clearly explain what the costs will be, and collect their fees over a period of months so the client isn't hit all at once; and
* pass a comprehensive, independent audit to achieve accredited "Best Practice" member status in TASC.
I have yet to see any of these points mentioned in a national-level news article about unsecured and credit card debt. Why is that? When will journalists call someone in our industry to provide input for their stories?
Zack Anderson is president of 