A Cautionary Tale of "Debt Settlement," via MSNBC

Here's a sad story of a guy who got caught up in a "debt settlement" company, and ended up in Chapter 13 bankruptcy anyway. Much of the money he gave them got siphoned off, without satisfying his creditors. The debt settlement company got theirs, but it didn't help him. Here's the money quote from Lisa Madigan, attorney general for the state of Illinois:

""Consumers should never get involved with debt settlement companies," she said. "Hundreds of Illinois residents have come to our office who have fallen prey to what is essentially an outright scam. You can do everything yourself. You can figure out how much you make a month and reach out to creditors."
She said 40 percent of the people who sign up with debt settlement firms end up like Kopycinski, filing for bankruptcy anyway, and two-thirds drop out before even a single debt is settled."

So, talk to your creditors. Or, get ahold of local organizations affiliated with the National Foundation for Credit Counseling or call their toll-free number to find a member near you: 1-800-388-2227.