As the financial crisis worsens, more credit card borrowers on the brink of insolvency are turning to debt-settlement companies, say several firms. Through direct negotiations with creditors resulting in restructured debts and repayment plans, debt-settlement firms typically promise to chop borrowers' debts by 30% to 60% in exchange for a fee. Jack Craven, president of Debt Settlement USA, says his Scottsdale, Ariz.-based company is one of the nation's largest such firms, with 175 employees. Debt Settlement USA in 2008 increased its number of consumer clients by 42% from the previous year, and the company is on track to meet or exceed that growth rate this year, Craven tells CardLine, declining to provide specific client numbers. Consumer credit card debt accounts for some 90% of the firm's business, he says, adding it is not unusual for clients to have five to 40 credit cards with debts that run into the high six figures. Teresa Schumann, vice president of operations at the Irvine, Calif.-based debt-settlement firm Prosolvo Data Systems, says her company's business also is up substantially this year. Both Craven and Schumann say their companies constantly battle negative perceptions caused by disreputable debt-settlement firms that charge hefty upfront fees and fail to deliver services. Schumann is executive board member of The Association of Debt Settlement Companies, a consortium of 175 debt-settlement firms that joined forces in 2005 to improve the industry's image. "We monitor our members' business practices to make sure they are operating within appropriate guidelines," Schumann says. But Craven, who is not a member of the association, says such self-policing industry organizations are suspect and resemble "the inmates running the asylum." He hopes within the next year to help establish internationally accepted management standards for debt-collection companies.