I am not in any way disrespecting CFP’s. It is a tough designation and anyone who has that designation has my respect. I just wish that they would get a better education on how debt works. I continue to read more and more outdated advice from Certified Financial Planners in personal finance columns. The worst one was a CFP who boldly suggested that a person go to a debt settlement company. He claimed that the company would give them one lower payment, a lower interest rate, and they would be out of debt in no time. Maybe that particular CFP missed the Federal Trade Commission’s warning on debt settlement companies and how they are a scam.

I stumbled across this piece of advice given to someone who sent in a question concerning $85,000 worth of debt.

Since your main goal is to lower the interest rate, one thing you can try is contacting your creditors and ask them to lower their rates. Tell them what you plan to do if they first say “no”. There is a good chance the creditors will choose to lower your rate and keep you as customer rather than letting you go.

Maybe that would have worked a few years ago. Most credit card companies could care less whether or not you stay and most are unwilling to let you off of the hook. There is a very low probability that they will lower your rate. It is very hit and miss.

If that doesn’t work, there are other options available besides debt settlement. I’d suggest taking advantage of a free counseling session with a Consumer Credit Counseling Service (214-638-2227). A trained counselor could help you analyze your debt/credit in a matrix and show you the impact of various actions you could take. There is no cost for these sessions, which can give you a better understanding of the most effective way to pay down your debt.

Go see that consumer credit counselor and they will have you in a debt management program before you can blink. Then you will be outside any limited protection from the credit card act going into effect in February 2010. I have reviewed and researched many proposals for my book Deceptive Money only to find misleading and inaccurate proposals that play with numbers and present a false reality.

The reality is that you have to look at where you are today with your current debt by putting together a debt inventory. From that debt inventory, start figuring out when you will pay those debts off. Stay current at all costs and commit to that total debt payment you are paying right now.

If you are paying 5 cards each month with $800 then commit to paying that $800 until the last debt is paid off. Once one of the debts are paid off, then take that payment you were making to the now paid-off debt and apply it to the debt with the largest interest rate. Keep repeating that until the last one is paid off. Believe it or not, this works well even with high interest rate loans.

There is no easy way of getting out of debt the right way. You have to commit to a period of time and commit to the process. The good news is that it is attainable and life is so much better when you accomplish getting out of debt.

Tags: Bob Brooks, CFP, consumer credit counselor, credit card debt, Debt, debt management program, Deceptive Money, Federal Trade Commission, interest rates