Ramonita Berrios is one of those who sought help from credit counselors. But as CBS News Correspondent Mika Brzezinski reports, to this day she doesn't understand exactly how she was driven into bankruptcy, but she knows how it started.
She called Financial Freedom, whose representatives promised to consolidate her bills and begin paying them down at a cost of $795 a month. But then those same representatives skipped town with her money, leaving her with even more debt.
To see just how these credit counselors operate, Brzezinski went under cover as "Mary", a single mom with $20,000 in debt.
At both big companies and small, in person and on the phone, the only advice "Mary" got was to sign up for a consolidation plan.
But the hardest sell came from Danny Sayid, a representative of Financial Freedom, who CBS found the same way Ramonita found her reps.
"You just make one money order every month and we take care of the rest," promised Sayid.
Attorney Charles Juntika says a third of all bankruptcies involve people whose finances were made worse by credit counseling. Brzezinski showed Juntika the video of her going undercover and meeting Sayid.
In the video, when Brzezinski tried to show him pay stubs and her budget, Sayid just pushed them away.
"How is he going to work out a payment plan with you if he doesn't know how much you make and what your expenses are. That's astounding," said Juntika.
Carol Walker, the president of Financial Freedom International, said she fired the fly by night representatives who scammed Ramonita Berrios.
"Our whole mission and goal as a company is to help people, to help give them back their financial freedom," said Walker.
"To have had an affiliation with someone like that has been very devastating for us," she continued.
But when we showed her the tape, she saw another one of her agents in action: Danny Sayid.
"That is just appalling, he's totally misrepresenting," said Walker.
When we confronted Danny Sayid, he only seemed concerned about the business he lost with Mary.
"You get paid for this, I lost money in this deal, so adios," he says.
Ramonita Berrios' money is also lost in a pile of conflicting contracts. The Financial Freedom reps had her sign a contract with a new company called Debtco, but they continued to take her payments. When they disappeared, Debtco was left with the $4,000 discrepancy.
Where is her money?
According to Debtco's president Nicolas de Segonzac, "There is no discrepancy with Debtco. We can account for all the money, penny by penny."
And they did, showing they were not responsible for the loss. When we showed de Segonzac, we saw just how murky agreements in this industry can be.
"Well this contract doesn't have our name on it," he said.
But one of them did, the client put all her information on it and signed it.
"Let me put it this way, it is not an official Debtco contract," insisted de Segonzac.
Now bankrupt, with her credit in ruins, Ramonita Berrios only wants one thing, "I don't want anybody else to be hurt the way I was hurt, that's what I want."
But experts say there's no way to prevent that from happening in this virtually unregulated industry where anyone can call himself or herself a counselor.
Part 1: Credit Counseling: Relief Or More Grief?