How the heck can any debt be good? To me, it can't. If we're really talking about debt. Let me explain.

The other day I saw a segment on TV talking about "good debt" and "bad debt". I've heard those terms over the years, so the concept is nothing new.

But I don't think there is ever anything that could be called "good debt".

I'm not saying its wrong to borrow money. That's how many people go to college, buy a business, and own a home. All are ok. But I don't think of that type of borrowing as "debt". I think of those as more of an investment. As in using the money to buy something that can build in value or usefulness over time.

I know, call me picky, we're just talking semantics here, right?

Wrong!

To me, debt is different than borrowing. Debt is borrowing money from a position of weakness. And buying something (that you really can't afford) without any long lasting value. Debt usually just grows and grows. And you get nothing good out of it - unless you call delaying payments as something good.

Here's a story from my day job. I work at small university. Since college is admittedly SO expensive, many students borrow money. This way they have some time to pay it back once they start their new career.

One day a graduate came in and asked if we offered any advanced majors in his field of study. He was looking to stay in college as long as he could. So he could keep delaying his payments. And this person wasn't a young student just starting out. The student was a working professional in their 50's!

So, borrowing money for school is ok. Borrowing more money just to delay payments, that's debt. And it isn't "good debt" in any way!

Calling any debt "good" just sends the wrong message, plain and simple. And gives people the idea that they can just use their credit cards or borrow money in other ways without a plan to pay them back:

"Oh, I'm buying a flat screen TV, and that's good debt because our family likes watching TV." Wrong. Wrong. Wrong!

Sure, sometimes you get a good deal with 0% financing and you can pay it back over time with no penalty, and no interest builds up. That's a little different, assuming you can actually pay it back BEFORE the 20% interest kicks in.

And if you borrow money to start a business or go to college, you are using that money to "build" something. And those are all good, too.

But I don't consider that debt, I consider that investing.

So to me, there is no such thing as "good debt". Ever.

Not that you should never use a credit card to buy a new TV. Just don't get into the habit of calling it "good debt". And don't look at borrowing for college as "good debt". Call it something else, like "investing for my future". Otherwise when times get tough, you might have a hard time drawing the line between the two. And too much good debt will simply become too much debt, and you'll come to website like this looking for help.

If you borrow money to buy extra clothing or a flat screen TV, things you WANT but don't really NEED, that's bad. You can never get any real value out of these things. And they can only get you into trouble over time.

There's no real honor being on Oprah or some local TV show trying to justify "good debt" vs. "bad debt". Debt is bad. Always.

Do you agree with me? Or am I just being too picky with the words "good" and "bad"? Let me know below.

Earlier this week I saw a segment on the Today Show talking about the risks of debt settlement, and the horror story from a woman who was ripped off. So I started thinking, "why do so many people think debt settlement is nothing more than a scam?"

Sadly, the answer is obvious.

But equally sadly, it is a real, honest, viable option for some people in debt. In fact, I used debt settlement several years ago and it saved me from financial ruin do to a bad business idea.

So debt settlement is not a "scam" all by itself. The scam is those companies who are "bad apples" as described in the video.

So why is it that nearly all the publicity for debt settlement is negative?

Two reasons:

1-Companies who are not legitimate
2-Consumers who are not well educated (yes, consumers deserve some of the blame)

Let's start with #1. Are there any legitimate companies? Yes, of course. (Here are 2 settlement programs with great track records of excellent customer service.) Are there scammers? Yes!!! Just like in any business, some companies are just out there to make money, whether or not they actually help you. The key is figure out the difference BEFORE you get sign up and end up feeling ripped off.

How can you determine if a debt settlement company is legitimate?

• Check BBB records. This is very easy to do. And don't just look at the letter grade, find out how many complaints have been filed. Any more than a handful and move on to the next company.

• Ask for references. Any company that does a good job can give you references.

• Don't sign anything unless you read AND understand it. This is a "no brainer" and the most important thing to remember. Don't trust what the salesperson or debt counselor tells you. Read for yourself, and ask questions if you don't understand.

What about #2. Why are consumers to blame for some of the bad press about debt settlement?

• People DON'T do any research or shop around. There are HUNDREDS of settlement programs out there, so keep looking until you find a good one.

• If the ads sound too good to be true, then they usually are!

• People DON'T realize how debt settlement really works...

So, how does debt settlement REALLY work?

1. You must be behind in your payments. If you're already behind, then you're a good candidate for settling your debts. If not, you must stop paying. If you can pay, then pay. If not, consider stopping payments to get the leverage needed for a settlement (why would any creditor give you a discount on your balance if you are paying your bills???) You MUST KNOW THIS ONE FACT or else you'll just end up being another horror story!

2. Your creditors will call you even if you've hired a company to settle your debts. A good settlement will help you with this, and teach you what to say. DON'T ignore the calls, as this will only make things worse.

3. Your credit will take a big hit. For some people, having lots of debt is worse. And good credit is meaningless if you are drowning in debt. But your credit score will be lowered (although there are legitimate ways to repair your credit, but that's for a later discussion).

4. You must have a sum of money to pay the settlements. Some companies will help you start a savings account for this purpose. Others require you to find a way to come up with the money. If you can't come up with a lump sum, don't use settlement until you can!

5. It is a stressful process. There's no way around it. But if you know how it works and have found a quality company to help you, you WILL get through it!

Unfortunately, those companies out for a quick buck don't care if their customers know what they're getting into. So it's up to us as consumers to know what we're buying. For some people, debt settlement IS the RIGHT solution. And if they do a little digging, they WON'T get ripped off!

What do you think about debt settlement?