Debt Articles

Why Debt Relief Help is Broken in America

Written by Steve Rhode

Being in debt is a terrible situation. You are at your lowest moment in life or darn near close to it. On top of that you may be experiencing the common side effects problem debt brings like depression, hopelessness, feelings of failure, or marital strife.

The one point most can agree on is being in debt is not a happy place in your life.

A number of companies exist that claim to be able to help and assist consumers with debt problems. These include the perceived gallant knights of the debt help space, the non-profit credit counselors, and also include debt settlement companies, debt reduction companies, and more often today, student loan assistance companies.

But there is one common trait each of those groups, including the fluffy credit counselors, has they won’t share with you. And it’s a critically important trait you need to know about.

What Debt Relief Companies Won’t Tell You

What I’m about to share with you will go against your beliefs and your knee-jerk reaction will be I’m mistaken. But the sad truth is I’m not.

You see, debt relief companies have no requirement to put the needs of the consumer first. They have no requirement to act in a fiduciary capacity to help you make the best choices and decisions possible to get out of debt in the smartest way.

That’s right. The companies, both for-profit and non-profit, put their needs before yours and those needs are to maximize their revenue.

If you blindly trust what any debt relief company tells you you may be doing more harm to yourself and sacrificing your financial future. So what can you do about it?

People in debt can be easily manipulated by playing with their emotions. They can be steered into enrolling in debt relief programs that the debt relief companies want to sell. And these programs include credit counseling.

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The typical emotional hot button is one of personal responsibility. Companies allow people to continue their belief they have an obligation to see their debt through and make the payments at all costs. And who does this message benefit the most, that’s right, the debt relief company. When people bite on this message it generally results in the consumer enrolling in a multi-year program to deal with their debt.

In general credit counselors and the other debt relief providers, like debt settlement companies, are secretive about one of the most important things to know, their success rate. They remain silent about how well their service delivers the one thing they are selling, to get you out of debt.

Without knowing this critical factor, it’s like buying a car without knowing the fuel milage or having surgery without knowing the odds of surviving. It’s a really bad way to make an important decision that will impact your wallet or your life.

Debt relief companies almost always fail to educate consumers about the reality of digging out of their situation. Isn’t it odd we applaud companies that find themselves in tough spots and reorganize their debts through options like bankruptcy but we feel bankruptcy for consumers in tough spots is not the right choice. And debt relief companies typically reinforce this errant message.

Making good decisions about getting out of debt involves making smart and informed choices about what is best for you both now and moving forward. One of those informed bits of information is for you to know when you are talking to a debt relief company the person you are speaking to is not an impartial adviser but a salesperson. Many are paid with commissions for selling you their product. They do not have your best interest in mind.

If you are facing a tough financial spot, the absolute best advice anyone can tell you is to explore all of your debt help options before you leap to make an emotional choice based on the verbal promises of a salesperson. Talk to a credit counselor, a debt settlement company, and absolutely talk to a consumer bankruptcy attorney. Get the facts from the three major camps before you rush to do anything. And once you’ve done that, consider using the get out of debt calculator to compare what you heard with the reality of the major options and more to get out of debt.

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I want you to make smart choices and just not leap at the first option that comes along. When it comes to getting out of debt the best advice you can hear is “do not assume.” Only you can have your best interests in mind.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • I need a little bit of clarity. You mentioned education. I think education and options are important but that responsibility cannot rest with a debt relief company. The lender should be responsible to educate the consumer first no?

    • If the lender was selling widget X then it would make sense to require them to educate the consumer on Widget X. But when it comes to the lender role in the extension of credit, there are already a wide number of required disclosures. My opinion is the lender has no role in educating consumers about things beyond the lender scope of responsibility.

      As an example, if you want to buy a car that gets poor gas mileage and the dealer misrepresents the mileage then that’s not the car financing company responsibility.

      • Actually highly untrue statement regarding auto financing. Automobile Sales Finance Act requires all dealerships to provide 1 contract amongst other things. Misrepresentations can allow the buyer to challenge the lender and the dealership. I once had a negative equity situation on an old car and the dealership added like 4500 to the new car I was buying. 6 months after the purchase the dealership was audited and the lender redeemed that cash back as adding the extra to the purchase was illegal. The financer and the dealer have dual responsibility to be compliant with the consumer.

  • I don’t disagree with anything in the article, Steve, however the fact that bankruptcy attorneys also have no obligation to do what it is best for the consumer should also be added. They will likely push people towards the solution that will line their pockets just as much as a debt relief company will do the same. That being said, there are attorneys as well as credit counselors that DO want to do their very best to actually help people, as well as those that just want to collect their paychecks.

    What that means, unfortunately, is that the burden falls on the consumer to educate themselves as to all their options (whether it be some sort of consolidation loan, debt management program, debt settlement program, or bankruptcy) and determine what the best option is for them.

  • This is the single biggest issue that most debt relief companies never want to discuss. You have an emotional and confused consumer looking for help and advice about how to best solve their situation and the person providing the “help” is a commissioned sales person who is typically lacking both the education and the experience to be advising that consumer in the first place.

    They like to call what they do consultative selling, but there is usually a heck of a lot more selling than consulting going on.

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