So-called debt relief programs are sprouting up like mushrooms after a spring rain. The economic storm clouds of 2008 turned into a full-fledged downpour in 2009 with unemployment in double digits and credit tougher to get than a seat on the Tokyo subway. In the aftermath, we have parasites offering desperate Americans that chance to pay just “pennies on the dollar” to settle their outstanding debt and stop harassing collection calls.

In short, debt settlement programs have you not pay your bills until your creditors agree to settle for a reduced amount to clear that account. A recent article from the Wall Street Journal highlights the major pitfalls in debt relief or debt settlement programs, you will end up paying a hefty price for the “help” provided by these companies, and it only works for a few of the consumers who try. Your credit score, the coin of our realm, will likely be worse off than before.

The companies make money directly from the consumer, usually whether the plan works or not. Fees are typically around 10% to 15% of the debt. Fee structures vary, but a common practice is that the client pays about 40% of the fee in the first few months, and the rest within the first year. A big problem is that settlements (if they happen at all) will often take months or even longer than that.

All the while, you can be wracking up extra penalties and fees, and your FICO score will be lower than the Detroit Lions’ scoring totals.

The Federal Trade Commission and various state governments are investigating these firms to determine whether or not additional regulation is needed at the national or local level. Governments are taking a much more aggressive stance against financial firms that prey on vulnerable consumers and I wouldn’t bet against debt management companies charging upfront fees having to yield to more regulation and better disclosures to consumers.

The Journal advices consumers to look to counseling firms that don’t charge upfront fees. The National Foundation for Credit Counseling (www.nfcc.org) has a directory of counselors across the country who offer debt management plans whereby banks agree to lower monthly payments or interest rates in exchange for timely debt payments. It’s not pennies on the dollar, but it is for real.

In the end, there’s no such thing as a free lunch, and no easy way to get out of deep debt. It takes commitment, sacrifice and time. No one can do it for you, but there are reputable organizations out there than can help. As with any financial transaction remember to ask a lot of questions and if it sounds too good to be true then it probably is.