Debt Shield, Inc.
Debt Shield, Inc.

Debt Settlement Creates "Greatest Consumer Welfare" According to New Study

Award-winning debt settlement company alerts consumers to a new report that calculates consumer benefits to different debt relief approaches.

Columbia, MD, September 06, 2009 --( Executives at Debt Shield, a Maryland-based debt settlement company, are alerting consumers to a new report published by Southern Methodist University that finds debt settlement programs "create the greatest consumer welfare of any [debt relief] approach," specifically when compared to consumer credit counseling.

According to the report's author, Richard Briesch, PhD and Associate Professor of Southern Methodist University's Cox School of Business, the aim of the study was to understand different approaches to debt relief and analyze consumer benefits for each approach.

The report, "Economic Factors and the Debt Management Industry," also found that debt settlement "has an increasingly higher value to consumers with higher account balances and higher total debt," which echoes sentiments Debt Shield CEO Phil Fewster has been explaining for years.

"Debt settlement serves a niche of people with overwhelming credit card debt," said Fewster. "It fills a debt relief void between credit counseling, which many consumers cannot afford, and bankruptcy."

Fewster explained that credit counseling is a legitimate way out of debt for some people, but that debt settlement is specifically designed to help people with overwhelming debt as a result of a hardship such as unemployment, medical problems or divorce. This is especially important given that the long-term unemployment rate in May 2009 was triple the number at the start of the recession, according to the U.S. Bureau of Labor Statistics.

The report, which also analyzed the current economic climate, states that "many consumers are barely able to pay their debts and are one emergency away from financial hardship."

The report also encourages sufficient industry regulation for the debt settlement industry, a suggestion Debt Shield embraces. As a member of TASC (The Association of Settlement Companies) and USOBA (United States Organization for Bankruptcy Alternatives) Debt Shield is committed to promoting good industry practices and uniform legislation.

"Even prior to Debt Shield joining TASC and USOBA, I independently met with legislators and other industry executives to discuss the need for regulation of the debt settlement industry," said Fewster. "We have seen some fly-by-night companies that not only harm debt settlement's reputation but, more importantly, could affect already vulnerable consumers."

The goal, according to Fewster, should be to enact fair legislation to standardize the debt settlement model without restricting the business so much that ethical and hardworking companies such as Debt Shield are prevented from staying in business due to creditor, credit counseling, and other competitive interests lobbying to restrict this highly-demanded debt resolution option.

"Many people do not realize that the credit counseling industry is largely controlled by creditors and most Americans who enter into a debt management program through credit counseling do not complete it,"* explained Fewster. "In actuality, debt settlement is the only model that works exclusively for its clients, and debt settlement firms don’t get kicked back monies from the creditors like credit counselors do. It’s a shame that some creditors and credit counselors would rather spread negative propaganda to deflect their issues and guard their territory rather than coming together to work towards the common goal of helping our country dig out of this deep recession, one American at a time if need be.”

Prior to Briesch's report, some of the benefits of debt settlement were also discussed in a multi-year study by the National Conference of Commissioners on Uniform State Laws.

To read the report in full, visit

* The statistic is derived from the report, "Credit Counseling in Crisis," published by Consumer Federation of America, in conjunction with NCLC, April 2003, page 23: "Most agencies do not release information on their retention rates, although a 1999 NFCC memo cited by Consumer Reports found that just 21% of their clients completed DMPs while about the same percentage left to self-administer debt payments. NFCC now reports completion rates of about 26% with about 20% leaving for self-administration."

About Debt Shield:

Debt Shield, Inc., is an award-winning debt settlement company helping consumers resolve their unsecured debt through mutually agreeable settlements in consideration of the consumers’ legitimate financial hardships. As an alternative to bankruptcy, Debt Shield provides a service for both debtors and creditors. For more information about Debt Shield, call 1-888-397-7546 or visit their website at

Debt Shield, Inc.
Maggie Beetz