When you are in debt, bankruptcy is not your only option for debt relief. Perhaps you want to avoid bankruptcy at all costs. In your efforts to do so, you may find yourself the victim of a debt consolidation scam.
How can you avoid falling for these fraudulent solutions? Here are few ways to spot a quick-fix scheme when you see one.
Too good to be true
Follow the advice that anything that sounds too good to be true probably is. Debt repayment always involves some level of sacrifice and discipline and takes time. There is no way out that is free of consequences. Review the information the company has given you. How well do you understand the plan the company offers? Watch out for vague generalizations, unanswered questions and overconfident promises.
Of course, debt consolidation is not free. However, a reputable business will not require a large upfront payment or access to your bank account. Nor will it have numerous hidden fees. Also, beware of advice such as stopping all contact with creditors and letting the company handle all payments.
Shady business policies
Look at the way the company runs its business. Red flags include:
- Lacking an address and secure website
- Having restrictive lawsuit policies
- Not having an affiliation or registration with any credible organization, such as the BBB
- Pushing you to sign documents without understanding them
Search online for reviews and complaints regarding the company to find out if it is legitimate.
The right way to get out of debt
The most effective way to protect your finances and credit is to have a lawyer help you. Although you may be able to find a reputable debt settlement option on your own with no problems, it may not be the best option for your situation. A debt relief attorney can review your case to see which routes will be most beneficial to your circumstances and may be able to negotiate payments with creditors.