Whenever you see the term "debt settlement" it creates some type of controversy - either "its a scam" or "I tried it and it made my problems worse" or some ad promising "get out of debt and save 50% or more".

Lets set the record straight: debt settlement is a legitimate debt relief option for certain situations. It's not an easy way to get out of paying what you owe. It's not an easy way to reduce your debt just because you went crazy with the credit cards. But for those who are getting way behind in their payments, it's potentially a very real way to avoid bankruptcy and save you from financial ruin.

But there's a problem.

Most of the companies out there don't tell you the truth. They just try to sign up anyone with some debt. Then start charging outrageous fees. Don't explain to you how debt settlement really works. Then when the process starts causing you some pressure, you back out.

By then, they've got their money. And you've got nothing but more debt.

BUT......

It doesn't have to be that way. There are debt settlement companies that won't rip you off. But instead they will properly educate you. And will help you get real results. If you really fit the profile of someone who can benefit from settling your credit card bills.

So, how do you find honest advice about debt settlement?

As I state over and over again, do your homework!

• Ask lots of questions
• Get everything in writing before you send in any payments
• Actually read what you are signing (and ask more questions if you don't understand)
• Check references, check the BBB rating
• Shop around and compare companies & their fees
• Above all, realize that this is NOT an easy way to get out of debt and avoid paying what you owe

If you choose not to do any research, prepare yourself for a very stressful experience!

SERIOUSLY NOW - Are there really people out there who think there's some easy way to get the banks to ignore the $48,000 in debt they've built up over the last few years and just say "Hey, it's ok Bob, we'll just forget how much you owe us and let you pay if off for only $16,000 and save 66%, just because you're a nice guy". I guess so.

Sadly, stories like these don't get any good publicity. All you read about are the stories about poor old Bob from some little town who got ripped off.

P.S. Shameless plug: Here's one of the pioneers of the debt settlement industry, a true expert in the field - Charles Phelan, owner of ZipDebt.com. Read for yourself the results he's helped consumers achieve the last few years.

If you've had success with another company, let us know in the comments below.

Throughout my childhood and well into my adolescence, my parents struggled with debt of all kinds, especially credit card debt. Witnessing them go through such money travails, I told myself early on that I wouldn't make the same mistakes they did. Although I feel as though I would have been much better off had they not made these debt-inducing mistakes in the first place, I think, in the end, that had I not witnessed their mounting debt myself, I would not have realized what a danger credit card debt can be.

While most of my peers in college excitedly nabbed credit cards when the going got tough--as it inevitably does as a college student--I simply did without. Of course, this can be difficult when all your friends want nothing more than to go out to eat or drink constantly, but in the end, it paid off. Still, since credit cards are so tempting during those college years, when adolescents get their first taste of "freedom", I think it's absolutely critical that parents teach their children about responsible finances very early on. Here are a few tips.

1. Talk to your kids about credit cards before they go to college.
   It's better to talk often and talk early about the pros and cons of credit cards. College students aren't a particularly responsible lot, or at least not yet, so suggest to them that it's better to wait until after college, when they have the resources and presence of mind to pay them off every month.

2. Don't send your college kids money if they run out.
   It sounds cruel, but in the end, it will teach them how to budget. Determine before your kids head off to college how much money they may need for books and personal expenses. While it's okay to be a bit more flexible during your kid's first semester in college, when both of you are still trying to figure stuff out, put your foot down later. College is the time to learn the art of saving and resourcefulness, so that they'll be fully prepared once out in the real world.

3. Practice accounting of expenditures with your child.
   This is one habit that I never learned early and I struggled with later on in life. Show your child how to keep a log of every purchase they make, so that they have an accurate, instant idea of how much they've got in the bank. Relying on online statements only sets you up for over-drafting, and this is something I certainly learned the hard way.

In the final analysis, getting out of debt is tough but doable. It's far easier to never accrue debt in the first place. Even if you already made those critical mistakes for which you are paying dearly now, help out the next generation. Don't let it happen to them.

This guest post was contributed by Jena Ellis, who writes on the topics of Online Certificate Programs. She welcomes your questions and comments at her email Id: jena.ellis20@gmail.com.

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?

Having a clear goal means everything when trying to get out of debt. Just like with losing weight or quitting smoking, if you're not motivated and aren't ready to do whatever it takes, you won't stick with your plan through the hard times. That's why so many people struggle with debt, and weight loss, and smoking.

The other day I came across an interesting video on motivation. It's not brand new, but the concepts are so amazing that it's worth watching more than once.

It's mostly about motivation in the workplace. But the ideas work for just about anything in life. The more motivation you have - and the more of the right kind of rewards you'll get - the more likely you are to successfully reach your goals

Here's the video. While you are watching it, think of how you can use the "candle problem" to help you solve your financial problems.

Motivation video

Pretty interesting, isn't it?

So here are some questions to ask yourself:

- What is your goal? And be specific. Is it getting out of debt? Staying out of debt? Saving up a certain amount of money? Retiring with a certain amount of money? Saving up for a big purchase?

- What obstacles are holding you back? How can you use the "candle problem" to get what you want financially?

- How can you overcome these obstacles? What types of rewards can you give yourself, so you can reach your goal?

For some people, goals are hard to define. If that sounds like you, then get a piece of paper and write down your goals right now! Be very specific. Don't just say "I want to get out of debt". Try writing something like "I want to pay off all 6 or my credit cards or all $15,300 of debt I owe".

For others, goals are way too strong a commitment. If that sounds like you, that's okay. Start small, like paying off one credit card. Or reducing your debt by $1,000 in the next six months. Then make a commitment to yourself to achieve it. Then on to the next goal.

For others, they know their goal and are committed, but don't have the right motivation to keep working towards their goal. If that sounds like you, then break down your goals into smaller steps AND write down specific rewards for each step you complete.

You can get yourself out of debt. If you believe strongly enough. And go about it the right way. All it takes is the right motivation, and a good plan for getting out of debt.

So you need help getting out of debt? No big deal, lots of people need help these days. Just don't be like the ones who sign up for a debt relief program with no idea what they are signing up for - and then complain about getting ripped off.

Sadly, many people who complain loudly about debt relief scams got ripped off for one of two reasons:

• They didn't check out the company first.

• Didn't really get ripped off, but had no idea what they were signing up for.

And these people give the good, honest companies a bad reputation. So do yourself a favor, and ask yourself these 6 questions BEFORE you sign on the dotted line (or before you give away personal information without signing anything).

1 - What type of service do you offer?
There are many terms used by professional companies - Debt relief. Debt management. Debt settlement. Debt consolidation. Credit counseling. So it is critical that you get a detailed explanation of the service you will be getting. It really doesn't matter what it is called. But it does matter what the company will do for you. And if you don't know what they'll do, how can you determine if it will help you? DO NOT sign up with any company that doesn't give you specifics. A company that just promises to "help you get out of debt" is a disaster waiting to happen, and you should run away from them.

2 - How exactly will you help me?
Once you know what service the debt relief company will perform for you, then you need to know how they will do it for YOU. Sure, not every situation is exactly the same. But you should know how they will help you get out of debt. Will they consolidate your payments? Lower your interest? Settle your debts for less? And when will each step happen? What else do you need to do? Don't be afraid to ask lots of questions. If you don't understand the process BEFORE you begin, you'll be setting yourself up to be miserable when the collectors call, or your credit gets ruined, and you don't know why.

3 - What does it cost?
Nothing in life is free. Including "non-profit" debt relief or credit counseling or whatever they call it. Non-profit simply refers to the way their business is set up, and does not mean you don't have to pay, or that the fees will be affordable to you, or that you won't get ripped off. So make sure you know the exact costs up front. If you don't get actual dollar amounts, walk away and contact another company.

4 - What is your BBB rating?
The Better Business Bureau will give an idea of how the company has performed for other customers. It is not perfect, but you can see if a company has a few complaints against them, or a few hundred. And you'll get to see if they respond to the complaints, or just ignore them. Don't focus on the "score" or "grade" since some local BBB's give out "F" grades to all companies in the debt industry, even if they don't deserve it. So look at the entire review, and stay away from any company with more than a 10-20 complaints.

5 - What are the downsides to using your service?
Yes, every debt relief program has some downside. Either the cost. Or the impact on your credit. Or that it takes time to get results. So be prepared for something negative. For most people that's still OK, since the end results of being out of debt will outweigh the negatives. But you should know the truth. If the company you choose won't be honest and tell you the truth, and insists there is no downside, find another one.

6-Can I see everything in writing before I decide? In most cases you should be asked to sign paperwork before you get started. If not, don't send any money or account numbers or anything personal without a written agreement. And when you do get the paperwork, read it carefully. If you don't understand what it means, ask the company to explain, or ask a friend or relative with some legal experience to read it over and see if they find anything wrong. Once you sign it and send it in, you lose the ability to easily back out of a bad agreement.

Don't assume that just because a company creates a fancy, expensive looking ad, or a professional looking website, that they're a good company to work with. Do your research up front. And if something doesn't seem right it probably is not. Or if it sounds too good to be true - that's because it probably is!