If you are deeply in debt and feel you have practically nowhere to turn – you have a target on your back! And, it is not your local collection agency taking aim, there is a veritable army of companies offering to rescue you.

Major among these, ranging from bankruptcy attorneys to debt relief “consultants,” is the debt settlement industry. Their pitch is very attractive – “Let us take over and negotiate your debt with your creditors (usually the credit card companies), and we promise to cut your balance owed in half and have you free of debt in three years.”

Sounds tempting, until the process is understood.

Typical arrangements require that a client set up a special account with the settlement firm and stock this with monthly deposits to create a “fund” which – when the balances reach sufficient size – the firm can then use to negotiate lump-sum settlements with the creditors, usually card companies.

What isn’t understood – or properly explained – is that this firm is getting the money that would ordinarily go to the credit card people and that this will not be a welcome diversion of assets as viewed by the banks – and the cardholder falls further behind.

Long before a fund is filled, the collection agency calls, credit reporting and legal process has started. As for the fund? Strangely enough, largely eaten up by “administrative fees” and still insufficient for negotiating power. My sainted mother’s Christmas Fund account would have served you better.

Now beset by nagging agency calls and even legal summons, many former clients give a failing grade to a majority of these firms. The Better Business Bureaus in the cities where these companies are housed are reporting negative report after negative report in the hundreds.

In defense of the industry, those companies consider themselves victims of the debtor’s historic lack of commitment in following through with a payment program. Much like the trainer at a health club, they feel that they cannot be held responsible for someone who is unwilling to show up to use the equipment and/or change their diet.

Personally, I don’t know what the failure rate might be for those enrolling at a Health Club, but roughly half of those using debt settlement programs fail to last full-term. Still obese and now being foreclosed on? That’s your fault, buddy…

As Providence would have it, another group of Saviors are on the scene – the Federal Trade Commission as well as scores of state attorney generals. I wonder how well that is going to work?

Do you have a story to relate on this? Written Off – America and Americans wants to get out the word. Share your story today. Please.

For another blog on this theme, check out “You’re in Debt. So?” http://bit.ly/aRekcL