Or are consumers just getting more irresponsible?

Hold on a second. I'm no advocate of debt collectors using rude language, calling late at night, using scare tactics, or anything like that, as described in this story. Being a bully isn't the right approach to get people to pay up.

But it may be necessary.

Because if you're a consumer, it's easy to think that all you need to do is call the number on your TV screen and you can pay off you debt for less than 50% of what you owe! So why in the world would you give anything to some rude dude on the phone?

OK, seriously.

I promote several debt settlement and other debt reduction programs here. And all have outstanding BBB reports, and are well-known in the industry. For the right situation, debt settlement makes sense. And you can save 50%. But it's not easy, and it's not for everyone.

But the average consumer doesn't know that. Or at least they don't want to know.

So the debt collectors have to get tough, right? They have a job to do. And if enough people walk away from their debts, then we all pay. The banks raise fees. They get into shady deals like giving mortgages to people who have no business qualifying for one. They scam those who do qualify. Not always, of course. But if we as consumers don't pay our bills, then the business model doesn't work.

Again, I'm not saying that bill collectors should be allowed to harass people. Well, maybe some people like my deadbeat friend Joe (sorry, just kidding).

But I would imagine that most people who get abused by debt collectors aren't living up to their end of the bargain - like they don't pick up the phone, or make no real effort to start paying back what they owe.

So, if the debt collectors are starting to call your phone number, follow these tips:

1. Don't ignore the calls! Hey, you owe the money. The least you can do is pick up the phone and explain your situation. Then do you best to come to some agreement to pay your bills. If you ignore the calls, expect the collectors to start calling at odd hours, or call you at work, call your neighbors and relatives, or worse!
2. Be polite. Don't yell. And if the bill collector calling you gets nasty, tell them to speak appropriately or that you'll hang up. And follow through if necessary. But if you want a fight, and you want more serious action to be taken against you, try arguing and you'll get what you asked for.
3. Don't lie. If you can't pay next week, don't say you will. If you can't afford $100, ask to pay $50. If you can't afford $50, ask to pay $25. Then pay.
4. Have a plan. And do it BEFORE you start getting phone calls. Look for ways to save money. Cancel your cable TV. Get a lesser cell phone plan. Stop eating out every Friday night. Sell stuff you don't need. At least until things get better. It's you responsibility to pay what you owe. Then, you'll be in better position to work out a deal when the dreaded collections calls start coming.
5. Get everything in writing. If you do come to an agreement, ask for it in writing. Have it emailed or faxed to you if necessary, to get it fast. Even though you sometimes hear "this message may be recorded..." don't expect that to help you when the written agreement doesn't match what you agreed upon with the agent on the phone.
6. Keep records. Of every call, and write down the name of the person you spoke to, the time of the call, the content of the conversation. The more information you have, the easier it will be next time.
7. Know your rights. Read these Debt Collection FAQs: A Guide for Consumers. This way you'll know if they're crossing the line, or just doing their job.

Just realize that debt stinks. There is no easy way out, "secret method", or quick fix. But no matter what, ignoring the calls from the bill collectors WON'T make life easier for you.

Do you agree? Or have any other tips for dealing with nasty collection calls?

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?