Many individuals and businessmen are struggling with their finances as the country faces a serious economic recession. However, industries which thrive in the financial misfortune of businesses - particularly those banks, law firms, and finance institutions that provide business debt consolidation services - are experiencing progress.

According to Sarah Leineke, owner of Nationwide Debt Settlement, a popular debt settlement company in Phoenix, her business rapidly flourished last year as many consumers plunged into debt problems. She claims that a year ago, her company just had 150 clients but last year's statistics showed that they now have almost five hundred customers.

Another firm that's based in Phoenix, Debt Settlement USA, has also increased its share of customers by as much as twenty five percent this year. "Last month was the biggest month we ever had," says Jack Craven, president of the company that operates in 29 states. Recent company statistics showed that they have signed up more than 1,200 clients. They were even forced to deny their service to many other clients.

1. Common Problems of Most Debtors - Bankruptcy

Having too many debts is a common occurrence these days. Many people lose their jobs and some companies suddenly go out of business simply because many people no longer find their products and services part of their daily necessities. Before, people seek the services of a business debt consolidation company because they want to get rid of their financial debts and they need a third party to furnish the negotiations and the debt repayment plans. Nowadays, most businessmen opt to consolidate their debts with the hopes of preventing bankruptcy.

Statistics show that the number of individuals filing for bankruptcy continues to rise in Phoenix. Reports made by the U.S. Bankruptcy Court, District of Arizona, showed that Metro Phoenix logged 1,552 bankruptcy filings last October 2008. This was more than a hundred percent higher than the filings made from October 2007. Countrywide, the number of bankruptcies reached 106,266.

2. Getting the Help of the Experts

To avoid being one of the bankruptcy victims, business owners choose to get business debt consolidation loans. They employ the help of debt consolidation companies and they try to avoid considering bankruptcy as one of their options. According to Leineke, her firm never advises their clients to file for bankruptcy protection.

Debt consolidation services are generally for people who are willing but unable to pay off their bills. In such cases where full debt repayment is impossible, credit counseling may be ineffective. Craven explains that "consumer credit counseling is not the answer". He further notes that consumers who opt for credit counseling instead of debt consolidation end up paying the same amount of their debts. Counseling does not involve negotiations regarding possible debt reductions. As a result, most consumers never get out of debt.

3. A Word of Advice...

Leineke points out that it is of common knowledge that the debt-settlement industry does not have a good reputation. Many are having second thoughts simply because of the predatory practices and the mounting charge up-front fees that are common in many firms.

To avoid being a victim of deceitful practices, Leineke encourages customers to "research companies before selecting one". They have to check with the Better Business Bureau and find more information about the company's affiliations. The most reliable business debt consolidation companies are those which are affiliated with International Association of Debt Arbitrators, the Association of Settlement Companies and the U.S. Organizations for Bankruptcy Alternatives.