LAS VEGAS - One in every 100 families in the United States will file for bankruptcy this year and millions of families will seek help to cut their debt. As 8 on Your Side discovered, consumers should be careful where they look for help.
Joe Marco wakes up early every morning to ensure kids at Adcock Elementary School get to class safe and on time. The job doesn't pay a lot, but he needs it. After retiring from his previous job and the death of his wife of more than 40 years, he discovered he was in debt.
"She had four credit cards I didn't know anything about," he said.
Not knowing where to turn, he saw an ad on television for a debt settlement company.
He called the number, signed up and started giving the company lots of cash to pay off his debt, which included a balance with Discover Card.
"I paid them seven hundred dollars a month," he said.
After making payments to the company for a year, the $700 bill became too much for him. When he called the company to lower the payment, however, he received a big surprise.
"I would call four or five times a day. The guy was either out to lunch, away from his desk, home sick or whatever," he said.
Frustrated, he called Discover Card to see if they could help and received another surprise. "Discover said they had never got a payment," he said.
Joe handed over thousands of dollars to the settlement company, but they didn't use a dime of it to pay off his debt.
Sadly, this isn't an uncommon tale. Five hundred thousand Americans use debt settlement programs - making them one of the biggest industries in the world for schemes and scams. With one in eight people in the United States more than $10,000 in debt, that is no surprise.
"What a consumer has to understand - or should understand before entering into a relationship with a debt settlement company - is anything that debt settlement company can do, the consumer can do on their own for free," said Michele Johnson with the Financial Guidance Center.
Johnson says these companies rarely work to the consumer's benefit. Often, they ruin your credit.
Johnson decided to help Joe with his situation. The Financial Guidance Center, 8 on Your Side and the Senior Law Project worked together to get Joe's finances in order and get him his money back from that debt settlement company. Joe retrieved $6,000.
That huge debt is no longer hanging over Joe's head, and he's on track to a life of financial freedom.
If you have a consumer complaint you want investigated, contact 8 on Your Side at 650-1907 or e-mail us.