Report: 1 in 3 people in debt collections - NBC12 - WWBT - Richmond, VA News On Your Side

Report: 1 in 3 people in debt collections

RICHMOND, VA (WWBT) -

It's a startling statistic that hits many personally. Right now, one in three people deal with debt collectors. There is help available, but you need to do your homework.

There are a number of factors that find more and more consumers in over their heads in debt.

"We see a lot of people who have had to have a reduction of income to keep their job or they've been in a position where they're used to having an increase year after year and that increase has stopped," Rebecca Gershowitz of Clear Point Credit Counseling said. 

All while the cost of living continues to rise. Gershowitz says it's no surprise a new study finds 35 percent of Americans are in so much debt that their accounts have escalated into collections.

"It doesn't have to do just do with credit card payments. It could be if you're behind on your utilities, your cell phone bill, if you get a medical bill in the mail and don't pay it in that first 30-day cycle," she said.

Fortunately, there are debt management companies that can help you get back on track but consumer beware. Leaders with the Better Business Bureau say some companies will falsely list their logo on  websites to make you think they're associated with the Better Business Bureau. That's not always the case.

"Just be sure that you double check the report on that company and make sure that you click on that BBB logo because just because that's on there, doesn't mean that they didn't pick that up from somewhere else," Better Business Bureau's Tom Gallagher said.

He says many for-profit debt companies lure you in with promises to help - which may set you back in the long run.  Some want you to pay up in advance.

"We see a thing online where they're talking about ‘get out of debt. We'll help you do that. We'll consolidate all your debt.' Then they pack you in at a very high interest rate," he said.

So instead, Gallagher suggests finding a non-profit debt management agency. Experts say many times your creditors will work with you if there's a serious setback.

"Don't just kind of hide behind the phone or not answer if its ringing, ask for help if you need it," Gershowitz said.

Some 140,000 people work in debt collections. On average, collection agents recover 50 billion dollars a year.

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