Having trouble paying your bills? You’re not alone. Many people are struggling with their finances. You may be tempted by ads from companies offering to settle your debts for 50 cents on the dollar, but beware – it could be a trap that will leave you further in debt.

Until recently debt settlement companies make big claims about how they can help you and then collect most or all the fee from you long before they have helped to eliminate your debts. You pay the fee whether your debts are settled or not. A new law bans this practice. Companies now have to earn their fee and actually settle your debt before you pay!

Here is the actual language of the new rule. (PDF)

Here is a summary explaining the new protections. (PDF)

If you’re having problems paying your bills read this tip sheet (PDF) and then contact a reputable nonprofit credit counselor by going to www.nfcc.org.