It's very easy to get in over your head with debt. What's not easy, is getting out of debt. Many people wish their money problems could go away magically, and there's many companies that advertise on the web or on late-night tv that say they can settle your debt.
The problem is that many of those companies are not accredited to operate in Kansas.
"You know, like many things, if it seems too good to be true, it probably is," Kevin Glendening says. He's the Deputy Bank Director for the state. His office is investigating some of these companies practices.
The way these companies work to get customers to pay thousands of dollars upfront. Then a new account is created with that money, then take money out of your personal account. When the new account has enough money in it, the company claims it will negotiate with your creditors to pay down your debt. But in the meantime, your creditors are not getting paid and your interest rate could go up because of it. You could even be sued for non-payment.
"Those folks who are seeking some assistance with debt relief need to be realistic with their own situation and be mindful that there really aren't any quick fixes to resolving credit problems. It takes discipline and work on the part of the consumer to work out of those problems."
He says the best thing to do is first seek credit counselling from an accredited agency. One of those counsellors will work out a budget with you to help you pay down your debt.
"Companies that I think consumers should avoid are a lot of the ones that you see advertised on the late night infomercials promising people to get people out of debt and improve their credit magically overnight."
