You may have seen the attractive commercials for Credit Counseling Company's that offer immediate debt relief. Before one elects for this option, it is important to have a full understanding of what Credit Counseling can accomplish for your particular case.

Consumers need to be especially cautious when considering using the services of a credit-counseling firm because it has led to an alarming number of cases in which a consumer's debts skyrocket through no fault of the consumer.

According to the Better Business Bureau, as the number of Americans seeking assistance from credit-counseling firms has increased, so has the number of complaints against credit-counseling firms. In 2003, the Better Business Bureau recorded six times the number of complaints as it received in 1999, a mere four years earlier. Consumers need to be especially cautious when considering using the services of a credit-counseling firm.

Currently, the Federal Trade Commission, as well as Attorneys General from four states, are investigating and prosecuting some credit-counseling firms for engaging in deceptive business practices. Furthermore, the U.S. Senate is holding hearings on what one insider terms "predatory practices" in the credit-counseling industry. In certain cases, the firms are said to have misled their clients regarding their fees, as well as whether the fees would offset the individual's debts. In other cases, credit-counseling firms are charged with accepting consumers' payments but neglecting to pay their bills in a timely manner.

According to financial experts in the field, some credit-counseling firms will offer you a free financial review and will not begin to discuss a debt management plan with you before examining your situation with due care. Other credit-counseling firms may charge you a small up-front fee, as well as a monthly transaction fee, but you need to ensure that the firm's payment cycle coincides with the due dates for your original debts. If the credit-counseling firm does not pay your bills on time, you can be held liable for any accrued interest and late charges. Once these charges begin to mount, your chances of escaping from your debt will decline sharply.

The moral of this is that all consumers need to look beyond the appealing commercials that promise debt relief via immediate credit counseling. A consumer's failure to investigate a credit-counseling firm can result in increasing his debt ratio.