The recent change in economic conditions has forced many Americans to reevaluate their spending habits to prevent debt. In many cases, however, debt is inevitable. An increase in prices for everyday goods and the fact that many individuals have lost their jobs or are underemployed has led to an increase in debt such as credit card debt. Because of these increases, many are trying to find solutions and debt relief.

In some cases, where the individual in debt is unable to work his or her way out, the individual may turn to bankruptcy for help. Depending on the type of bankruptcy chosen, the individual may be able to liquidate or get rid of common consumer debt.

One industry that has increased substantially since the economic downturn is the debt consolidation industry. These agencies tend to target those who are most vulnerable and, unfortunately, the businesses are often predatory. Federal authorities are now cracking down on these types of agencies in order to protect consumers.

Recently, a U.S. attorney charged the owner of a New York-based company that opened in 2009 for its predatory practices. The company allegedly scammed over 1,200 customers. The owner and several employees were charged with conspiracy to commit wire or mail fraud and wire or mail fraud charges.

The agency charged customers $49 a month to use their service. Overall, the company collected over $6 million in fees from their customers who were in need of debt services.

Those who choose to turn to debt consolidation agencies often also qualify for a type of consumer bankruptcy. The two types of consumer bankruptcy are Chapter 7 and Chapter 13. Chapter 7 allows the individual to eliminate most of his or her debts. Chapter 13 allows the individual to create a debt repayment plan that will reduce or eliminate fees and lower interest rates.

Source: The Sacramento Bee, "NY officials vow attack on predatory debt-fixing," Larry Neumeister, May 7, 2013