Be Careful. It is tempting for a person with debt problems to solve them by taking on more debt (a loan for example). Consequently there are shady organizations that take advantage of these people. Following are a few pieces of advice from the Federal Trade Commission on what to avoid, and what to watch out for, when seeking help to get out of debt. Avoid any loan officer who:

• Tells you to falsify information on a loan application (for instance tells you to indicate that the loan is for business purposes when it's a personal loan).
• Pressures you to accept a loan for an amount greater than you need.
• Pressures you to accept a monthly payment you can't handle.
• Tells you there is no need to read the literature he presents you or does not present you any literature.
• Does not use the correct terms, for instance calls a loan a line of credit.
• Promises certain repayment terms and on conversations but gives you opthers on paper.
• Tells you to sign blank papers for him to fill out later. Never agree to this.
• Tells you he can't give you copies of what you have signed.

Another group of shady organizations that exploits people with debt problems are those that promise that, for a fee, they can erase negative information from your credit report. Do not believe this. Only you can improve your credit report with time and effort. In addition, you should know your rights:

• You have a right to a free credit report if you have been denied credit in the past 60 days, if you are unemployed and are seeking employment in the following 60 days, if you receive government assistance such as welfare, etc, or if your report is not correct due to fraud.
• If you are not given a job due to your credit report, the prospective employer is obligated to tell you which credit information service he used.
• There are no charges for disputing information on your credit report. Ask the credit service a dispute form, fill it out and send it along with all required information.

When in a credit crisis, bankruptcy should be viewed as a last resource because the consequences are extremely serious. When you declare bankruptcy you are protected under the Federal Bankruptcy Code, but following are some of the pitfalls:

• Bankruptcy remains on your credit report for 10 years, affecting your probabilities of being able to get a mortgage, loan or credit card.
• You will not be exempt from certain debts like taxes.
• It may affect your pension or profit-sharing plan.