After my recent column on financial priorities for the New Year appeared, I heard from a reader with $55,000 in credit card debt. She said that her options were limited for paying off the debt and asked about using debt relief services. "Will that destroy my credit rating?" she asked.

Readers are smart to be cautious when considering the services of any agency or organization that promises to help you deal with debt. Since September of last year, the Federal Trade Commission has a total of $13.5 million in judgments against a group of debt-relief and mortgage-relief companies for violating telemarketing laws, charging high up-front fees and making false promises.

If you are facing down debt and creditors are calling, there are people who can help, but be careful. Here are the types of services available and the risks to keep in mind.

--Credit counseling. This is ideally an educational service where you meet with a counselor who helps you go through your current accounts, make a plan to pay off the debt, and learn the basics of budgeting to improve your financial future. Credit counseling is required before filing for bankruptcy. Unfortunately, it can be difficult to find a reputable provider, as much of the advertising and marketing may misdirect you to a debt relief or credit repair agency. Some so-called credit counseling agencies call themselves "nonprofit" yet still ask people for "voluntary contributions" -- this is a no-no. Contact the National Foundation for Credit Counseling for a good credit counselor in your area. Thanks to the CARD Act, you can also find a toll-free number on your credit card statement that connects to a reputable nonprofit credit counselor.

--Debt relief, debt settlement, or debt elimination. Debt relief companies ask you to deposit money in an escrow account that they will then use to pay down your debt, negotiating with creditors on your behalf to settle your debt for less than the amount owed over a period of 36 to 48 months. There are long lists of warnings on the Federal Trade Commission website, but the bottom line is this: It's best to stay away from these organizations.

Many of them are shady, misrepresenting themselves, using high-pressure sales techniques, charging high upfront fees and making guarantees that they can't keep. Even in the best-case scenario, let's say you find a reputable debt relief agency that gets your creditors to agree to resolve your debt for a discount. It can indeed damage your credit rating to even temporarily withhold payments on your debt, and any money that the agency does end up saving you can be taxed as income!

--Credit repair. You can correct errors on a credit report yourself (we'll explain how in a future column). And no third party is authorized to erase true information from a credit report. So there's really no such thing as credit repair -- sorry.

--Debt consolidation. Unlike credit repair, debt consolidation is a real thing. In its simplest form, debt consolidation means obtaining a loan such as a home equity line of credit, or a personal loan from friends or family, and using that to pay off higher interest debt. This can simplify your monthly payments and possibly lower your interest costs. But every loan has costs, and risks. For example, taking out a home equity loan risks losing your house if you can't pay it back.

--Bankruptcy. For those with truly unmanageable debt, bankruptcy is the final option. You need to hire an attorney, go through credit counseling with an approved agency, and pay several hundred dollars in fees. There are two kinds of bankruptcy: Chapter 7 is a full liquidation of all assets, while Chapter 13 may allow you to keep property such as a mortgaged house and complete a three- to five-year payment plan to have all debts forgiven. A bankruptcy stays on your credit report for a decade and can make it difficult to buy a home, get life insurance, get more credit or in some cases to get a job. Keep in mind that even bankruptcy does not erase child support, alimony, fines, taxes and federal student loans.

(Anya Kamenetz' latest book is "DIY U: Edupunks, Edupreneurs, and the Coming Transformation of Higher Education." She welcomes your questions at