If you are trying to improve your family's financial situation and reduce your overall debt, the claims and promises set forth by debt reduction companies may sound like the answers to your prayers. However, according to a number of top financial experts, many of these claims sound too good to be true for a reason - they are. For years, debt reduction companies flourished in a largely unregulated environment. However, in recent years, state and federal investigations across the country have focused more scrutiny on the industry. A number of states have enacted legislation that limit the types of activities that debt reduction companies can undertake on behalf of their clients, and a handful of states have even outlawed debt reduction practices altogether. Additionally, credit card companies and other financial institutions are increasingly unwilling to negotiate with third-party companies; many creditors have released public statements decreeing that they will no longer accept proposed settlements from debt reduction companies and that they would much rather deal directly with consumers.