Hi C.,
I have two friends who do this for a living. One is a personal credit coach and the other concentrates on restoring credit. Here are some things they tell me.
Watch Out! Alot of those firms are scams! Some of the supposedly negotiate a settlement to reduce your payments, and then accept one check from you. Some of them take your money and don't even pay your bills for you! You find this out AFTER they have destroyed your credit. Sometimes these firms ruin your credit worse than a bankruptcy, and it takes longer to recover from than a bankruptcy, too. Make sure that whoever you are working with is LEGAL and have been approved by the IRS. My friend, Noelia, said that the firm she works for is the last firm that the IRS has approved since like 2003 or something like that.
Sometimes it is much better to work with someone like my friend, Nancy, the personal credit coach. She does charge a fee, but it isn't as much as alot of these other places charge. She will go over your credit file line by line, work to correct any errors, and then give you an action plan of what YOU can do for yourself to improve your credit score and pay down your debt. My fiance and I used her to get our personal action plan, and we are taking the steps she suggested and taking charge of our money and credit ourselves. Its like going on a diet when you are overweight. If you simply go on a liquid diet or a set meal plan, you don't learn how to eat in the real world. As soon as the external controls are lifted, you begin to gain the weight back. In the long run, it is better to learn how to control yourself, eat smaller portions, and eat real food. I think credit is the same way. If you work with simply external controls to get your debt under control, you won't learn how to control yourself, live within your means, and make wise credit decisions in the future.
If your in so much trouble that you have to act immediately, then go to the Consumer Credit Counseling Service. They are a non-profit and, I believe, will help you for free. Don't get sucked in to those ads and flyers that come in the mail. They are surely scams. In this economy, so many people are having difficulty with their credit and debt that these companies do not need to advertise for business. Both of my friends who work in this field say that they are swamped for work, and are busier than ever.
Hope that helps,
L.