Unfortunately, just as predatory lenders took advantage of consumers to ensnare them in debt, there are companies lurking to take advantage of people overwhelmed by debt. They offer to reduce debt, negotiate with creditors, save your home or perform some other wanted task. Unfortunately, most promises are unmet other than charging high fees. True non-profit agencies, such as Consumer Credit Counseling Service, Inc., have and continue to perform valuable service in working out a Debt Management Program, whereby the creditors are paid back in full, with reduced interest, over 4 or 5 years. Others masquerade as non-profits and such companies have been shut down by the Federal Trade Commission and NJ Attorney General. Perhaps the most abusive are “debt adjusters”, which offer to settle debts for reduced sums and charge a percentage, usually 25%, of the savings. The consumer pays into the plan a monthly amount calculated to pay the estimated settlement and fee, but the first payments go to the debt adjuster as its fee leaving nothing to pay creditors for many months. Most realize the folly of such arrangement and stop paying. One fact that is rarely explained is that IRS Tax Law makes debt reduction as income, and the creditor must send you a 1099 for any reduction over $600. Many have been shocked to find a large tax bill April 15^th after paying large amounts to settle debts.