Debt reduction companies are everywhere. They advertise that you can “reduce your debt by 70%” or “become debt free quickly and easily.”

You have to take these advertisements with a grain of salt. You simply don’t know exactly what they mean. One thing that they could be talking about is bankruptcy. Many companies and debt reduction agencies are simply fronts for bankruptcy attorneys. A Chapter 13 bankruptcy could reduce your debt. But it completely ruins your credit report. It will usually cost you more in the long run, especially if you want to buy a home or take out a loan in the next decade.

It could be that the advertisement is talking about a debt consolidation loan, a home equity loan or a quick refinance of your home. If you don’t own your home, they aren’t going to help you. They are really just looking to make money off of your loan fees.

Some companies have you make a single payment to them and then they pay your bills for you. It is nice to pay one bill instead of ten, but there are large monthly fees for this service. Do you really want to pay someone to pay your bills for you? Especially when you are having money issues?

You should be cautious of companies that require a large up-front fee and monthly fees to manage your bills. You should also watch out for companies that say they can clean up your credit report. These companies don’t do anything that you can’t do on your own. They simply take your money.

And remember that you can’t believe everything you read or hear, especially in advertisements.