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When you are in a financial crunch worrying about how to pay the mortgage, college tuition, credit cards and other bills, even the most dubious offers to ease your debt load can sound appealing.

That helps explain why so many consumers willingly agree to pay hefty fees to debt-settlement companies that promise to erase their debts for about a third of what they owe.

Few people realize they can do a lot of this stuff themselves without padding the pockets of debt collectors, said Curtis Arnold, director of

Apparently, even fewer people realize that many of these offers are outright scams.

There have been a number of reports detailing the perils of such agreements.

In many cases, the consumer ended up owing more money from additional late charges and legal fees. Some had their wages garnisheed or had to deal with other collection agency action because the company never contacted the creditors.

There are safer and surer ways of dealing with your debt.

Callcreditors directly.Today they are more willing than ever to work with you, Arnold said, adding that credit card companies' outreach to members is unprecedented. Some of them are even creating repayment plans.

Discover is one example. Spokeswoman Laura Gingiss said the company offers customized payment programs for members who are having trouble paying their bills. "We have been very proactive in identifying and calling customers who are potentially in financial distress, and also assisting those who come to us directly for help," she said.

Gingiss added that Discover has stopped offering such offers as check mailings to accounts it deems to be high risk.

If you contact your credit companies directly, you should do a couple of things, said Chris Viale, president and chief executive of Cambridge Credit Counseling Corp., a nonprofit group in Agawam, Mass.:

Get any agreements in writing. This includes lower interest rates, waived fees or lower minimum payments. You should also ask how the agreement will affect how your account will be reported to the credit bureau. If the company tells you there will be no adverse affect on your credit report, get that in writing too.

If you feel you need financial counseling, seek a nonprofit counseling group that offers free services. To learn more about how to choose a credit counselor, go to the Federal Trade Commission's Web site on this issue:

Avoid companies that require you to pay fees up front. If you just need some advice or guidance, that should come for free, Viale said. However, said Viale, if you are seriously delinquent on a number of accounts, getting help from a reputable debt-settlement company may be a good option.

Typically, the debt-relief company will collect monthly payments from you and hold those funds in an escrow account until you have accrued a substantive portion of your debt, between 30 and 60 percent. They'll then make an offer to your creditor to settle. In the meantime, you will likely continue to rack up late fees.

But remember: If you don't mind the headaches of dealing with your creditors, you can do it all yourself and save a few bucks.

Scam sites

Earlier this month, the Federal Trade Commission charged four companies with deceptively marketing a debt-settlement operation that allegedly failed to provide services to reduce consumers' debt. According to the FTC, the companies offered debt-relief programs through the following Web sites: - - -