Debt settlement nightmare for Phoenix woman

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PHOENIX -- A Valley woman says she thought she was getting herself out of debt when she turned to a debt settlement company, but things just got worse.

We're talking about a lot of money. In fact, right around $175,000. That's how much Rosie Stewart says she is in debt. However, she claims turning to a debt settlement company made things worse.

Stewart says when the economy declined, so did the company she ran. As a result, bills began to pile up.

"I was relying on credit cards to live, but I didn't have any other options," she said.

Before Stewart knew it, her debt was out of control and she owed an incredible amount of money -- about $170,000 to $175,000.

With all that debt on her shoulders, Stewart says she became overwhelmed.

"All that eventually was catching up," she said. "I was trying to make the payments. I was trying really hard. It eventually caught up to me."

Feeling helpless, Stewart turned to a debt settlement company called RAM Financial Services, a company that she says made big promises.

Stewart said by paying RAM Financial Services $2,000 every month, the company would take that money and then begin paying down her debt month by month.

But after paying for nearly seven months, right around $12,000, Stewart says she got a surprise.

"So I started depositing the money -- February, March, April, May, June, July, August -- I was served with a judgment," she said.

That judgment was from a creditor that Stewart thought RAM Financial Services was paying with her money every month.

So Stewart called the creditor.

"Isn't RAM working with you?" Stewart said she asked the creditor. "They said, 'No, we haven't gotten any money, nothing!'"

So Stewart called RAM Financial Services. She wanted to know where her $12,000 went.

"They told me that it is in the contract that unless we get paid $20,000 to work on your cards, we aren't going to do anything," Stewart said.

RAM Financial Services says it's all right there in the contract Stewart signed.

The company wanted a $20,000 administrative fee before it would start working with her creditors and her $12,000 was being applied to that fee.

Stewart says although she signed the contract she didn't know RAM Financial services would be getting $20,000.

"I even begged them, I said, 'Please give me my money back,'" Stewart said.

3 On Your Side contacted RAM Financial Services, which tells us they go to extreme measures to ensure customers like Stewart understand what they are getting into before signing anything.

Regardless, RAM Financial Services sent us an e-mail saying, "We are willing to give Mrs. Stewart the benefit of the doubt in not understanding our program and can offer a refund of 75 percent."

That's right around $9,000 of the $12,000 she paid them.

But Stewart says she wants it all back, every penny, and says she has learned a valuable lesson when it comes to debt settlement companies.

"There is nothing that they can do that we can't do on our own," she said.

Stewart says she'll turn down the 75 percent and says she plans on suing RAM Financial Services to get all of it back.