Beware of Debt Relief Scams

While it’s true that the only form of debt relief guaranteed to be one hundred percent successful is bankruptcy – and, after the last round of Congressional tinkering, even Chapter 7 has been removed as an option for most Americans – a number of new companies specializing distinctly different forms of debt relief have helped tens of thousands of Americans eliminate revolving debt accounts otherwise impossible to repay. As generally defined, debt relief could refer to a host of different services that consolidate various balances into a single payment (theoretically featuring lower interest rates), lower amounts owed through negotiating a settlement with the lenders, or simply help borrowers figure out a proper budget to better repay the debts on their own.

Midst all the confusion, it seems almost inevitable that crooked firms would find ways of tricking unwary consumers through debt relief scams of one sort of another. Nevertheless, there are also methods of discovering which companies seen most likely to take your money and which ones honestly have the interests of the consumer at the forefront. It’s important to remember that, however pleasant debt relief professionals may seem, these financial professionals conduct negotiations with credit card companies for a living. While some of the counselors just advising borrowers on effective budgetary strategies and the best methods of structuring payments may be relatively affordable, the settlement specialists and other highly trained debt relief workers do expect to be well compensated for their efforts, and the more skilled their labor, the greater the price tag to be attached.

This doesn’t mean that they’re out to scam the clients that sign on to take advantage of their services. All the same, for borrowers who begin looking at debt relief firms primarily as a means of stemming the negative cash flow haunting their domestic affairs, the expense of hiring on a better debt relief specialist to aid matters should certainly be a consideration. Also, in order to avoid coming across one of the more insidious debt relief scams, you’ll want to see that the agents slowly and fully explain the extent of their own financial rewards as well as just what they do for their fees or commissions. These initial consultations between debtors and their counselors should be vital toward determining the reliability of the company and their style of business practice.

Do they explain just how long the debt relief program will likely take or do they imply that it’ll just be a matter of weeks for the potentially lengthy proceedings to culminate? Do they spell out all of the disadvantages of their proposed debt relief plan as well as the possible benefits? In the process of settlement, for example, the counselors will ask that their clients stop paying their credit card bills to underline the severity of their plight prior to serious negotiation. In the short term, most financially strapped American households would be ecstatic to see the cash freed up for other needs. Over the long term, of course, assuming the settlement negotiation creates a triumphant reduction of the overall balance amounts, the damage to the credit ratings of the borrowers should be a small price to pay for what could easily amount to thousands of dollars of savings. However, if the early research made some mistakes and the settlement approach does not work, you might have just paid to lower your own credit scores for no other purpose. Whether or not the limited information would be judged a scam or just a poor showing by ill-trained debt relief officers, it’s ultimately the obligation of the borrowers to insist upon full disclosure of every action that the debt relief company makes on their behalf.

The decision to reach out for help with your debt is not one that's easy to make. You were raised to "do the right thing", but now it’s nearly unbearable. You struggle along while your creditors are turning up the heat. And now you’re at the point where the late fees, penalties and interest expense make it impossible to keep your head above water.

Ask yourself this. If you could eliminate your debt without permanently damaging your credit, why wouldn't you?

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Bankruptcy is not your only option! Our goal is to help you determine the right course of action for you to take. We will connect you with a debt settlement company today that will help you avoid filing for bankruptcy protection.

Are your finances spiraling out of control? Get the information you need today to stop harassing creditor’s phone calls. Total Debt Relief provides a matching service to connect you with pre-screened Debt Settlement Professionals. These debt management pros will educate you on all of the options available to you to get out of debt. Total Debt Relief helps you make the most informed decision possible so that you can get your financial life back on track.