When I was in Law School, one of my professors constantly said “there is no such thing as a free lunch”.  Of course, what he was saying is don't expect the world to come and give you anything for free that you didn't earn or pay for.

The same thing could be said about the myriad of advertisements that you get bombarded with on social media claiming to provide “free debt relief”.  These advertisements make it sound like there is some government program that you aren't aware of that will remove your debts if you just apply.

Another term I learned in Law School was “caveat emptor”, which is Latin for “let the buyer beware”.  These “debt relief” programs are “for profit” companies that sound like they are non-profits, because their web sites have a lot of generic information that make them look like charities rather than companies who want to earn money off of you.  What is even more insidious is that they have partnered with many long-standing reputable names of companies, especially famous news outlets, that make them sound very legitimate.  Please understand that they are just using those names to get through the internet algorithm to reach you, but you will quickly be re-routed to a different company.

These companies basically offer two solutions, both of which are of marginal benefit to you.  The first one is some sort of loan to pay off existing credit cards or medical debt.  They will call this “debt consolidation”, but all they are “consolidating” is a bunch of your smaller loans into one big loan.  Passing the same debt from Company A, B, and C, to Company D does not solve your problem, and unless they are offering you very favorable terms, you haven't really resolved anything.

The second option is some sort of “debt relief” company.  Now I've discussed these types of companies in the past.  My general feeling is that they do not offer you anything that 1) you couldn't do yourself without paying their fees, and 2) they do not actually get you on a path towards being debt free.  What they do an amazing job at is getting the creditors to stop calling you, and that makes you believe that they have done something.  In point of fact, all that they have done is have you sign a power of attorney form that forces your creditors to send all correspondence to them instead of to you.  If you want to try one of these companies out, make sure that you get, in writing, a firm explanation of where your payments are going each month, and how long it will take you to be debt free.

I had a client call yesterday, and he wanted to know about how to get rid of his debt other than 1) paying off his debts, or 2) filing for Bankruptcy.  Unfortunately, the way that the world works, those are really the two options.  Now that doesn't mean that you can't pay off the debts at less than the outstanding amounts, which is also something I've written about, but the fact remains that the only 100% sure way to eliminate your debts is to either pay them off or file for Bankruptcy, and an honest and competent Bankruptcy attorney will usually give you a free analysis that will be far more effective than simply following the latest ad that you saw on social media or your web browser.