I’ve been following the conversations on Twitter (@GetOutOfDebtGuy) and watching what others are saying about debt management, credit counseling, debt settlement and bankruptcy and it really has me worried and concerned.

I’m a guy that lived through financial problems myself and went bankrupt in 1990. I then went on to found and run a non-profit credit counseling company, Debt Counselors of America and Myvesta, for twelve years. I’ve served on the board of a Consumer Credit Counseling (CCCS) office, been to the restricted meetings of National Foundation for Credit Counseling (NFCC), I’ve met a lot of the creditor representatives and toured the inside of credit card operations. I’ve been on the inside so I am confident that I know what I’m talking about when it comes to consumer debt.

But here is where I really struggle with the concept that credit counseling, debt settlement, or bankruptcy is a better solution to the problems of someone in debt. No one solution can be the right tool each and every time.

Debt management can’t be the universal fix for all money troubles, but experience and logic tells me that neither can any other solution. The promoters of debt solutions, some of which are nothing but opportunistic hucksters, keep trying to sell their debt relief snake oil as if it is a magic wand. It isn’t and it can’t be.

I was once heavily inside the credit counseling industry and yet even then it was my belief that not one solution is the best path for all to follow. That belief eventually lead to the closure of Myvesta the non-profit organization in the United States, the termination of a lot of great people whom I loved and respected and the loss of a pretty substantial relationship. And yet I made more money running that group than I probably ever will in my life again and yet my beliefs wound up causing me to cut my own throat and close it down. You see, I just could not, in good conscience, bend to the creditor pressure that everyone needs to go into a debt management plan (DMP) as the best approach.

So when I see non-profit companies today, pushing the magic of debt management, or newly formed organizations selling debt settlement as the single fix solution to all debt woes, it makes me angry. Angry, because if the consumer, the individual in debt, is the center of caring and compassionate advice, a one-size fits all solution is not the right answer. You first need to listen to the goals the debtor and their wants or needs they to achieve and then present a solution that achieves that need.

Credit counseling groups suggest debt management far too often and inappropriately because that is how they make money. The public does not understand that for credit counseling or debt management groups that service is the product. There are sales quotas, bonuses, and sales training that is given to sell consumers debt management services. Unsuspecting debtors are put in debt management, debt settlement, or bankruptcy programs every day simply to extract money from the consumer, not because it is the right solution for the person in trouble.

Lord knows that I have made my share of mistakes in life, but one mistake I am proud to say that I have always avoided was to suggest or recommend any solution to anyone that came to me as a sale or if it was not the right solution for the individual. Having walked in those uncomfortable shoes of debt, I try, each and every day to remember how that felt and to treat each and every debtor as my brother or sister in debt.

On my GetOutOfDebt.org site I answer questions from people in debt, every day. And in order to help the anonymous person find a direction to look for assistance I might suggest one of the tools (debt management, debt settlement, bankruptcy) to investigate to address their situation. I also typically suggest that the person investigate more than one option and then decide which solution would best fit their needs. I am not wed to any one solution in my advice.

And if someone clicks on an advertisement on the site or fills out a request form, that might generate some revenue for the site*, but that is absolutely not what drives me to help people for free. I’m just as happy if someone does not click on a link or fill out a form as long as they get advice which helps to clear the fog of confusion and doubt and guides them in a direction that allows them to find a reasonable solution to their debt problems that best meets their situation.

The solution that debtors need can’t be defined by a single product but by a single philosophy. That is the philosophy of caring, compassion and guiding the debtor to the right specialist to deliver care.

If I am an ophthalmologist and I’m manning the emergency room, not every patient that comes through those doors is going to need eye care, but they are in need of some care. It would be my job to triage the patient and get the appropriate specialist, maybe a neurologist, to see and care for that person. The exact same thing is what is needed in the debt world.

I look at my GetOutOfDebt.org site as a financial emergency room. I read questions from debtors around the world and triage the situation and guide people to the right specialized care using my life experience and knowledge.

I’m afraid that those that simply promote and sell a single solution for debts problems are not doing that. Instead what they end up doing is turning people away that don’t fit the money making model of the promoter or put people into solutions that are not going to succeed only to line their own pockets.

Trust me, I don’t want to be sad or cynical about this. I would love for the world of debt relief to be different and in the perfect world that I envision, every person in trouble could go to any debt assistance provider and find the best solution rather than the solution du jour.

It is not a perfect world.

Steve

* And by the way, I use the revenue from the site to help support people in need and I donate all of my time, for free, to answering questions. My belief is that if you do good things in life, good things will happen. I’m not a saint, just some that really cares, that’s why I give away so many hugs at the end of my answers.