Borrower Beware! What You Need to Know about Debt Relief Services

Are Debt Relief Services Legit?

If you feel as if you are drowning in debt you’ve no doubt considered a number of options to help you. People struggling with finances often take drastic measures to alleviate their circumstances.

Unfortunately, these drastic circumstances aren’t always helpful. Many of the debt relief solutions that exist aren’t solutions at all. In some cases, people trying to fix their debt problems actually end up making things worse.

Debt relief services are often an example of this.

Debt relief sounds like a good thing. If you’re struggling to pay your bills and serious consequences are on the horizon, it can be tempting to think you can relieve your problems with a simple solution.

Unscrupulous debt relief providers prey on people who feel financially desperate. They offer a fresh financial start when what they are actually doing is making the situation worse. Debtors feel as though they are taking steps to resolve their debt issues when in reality they are creating a bigger problem.

There are legitimate debt relief businesses out there, but there are also scammers. These scammers will take your hard-earned money and use it for their own benefit, all the while leading you to believe your debt situation is improving.

Weeks or months after signing up with a scam debt relief service you realize your financial situation has worsened and you have fewer choices. Many people realize things aren’t as they seemed when they receive notice of a lawsuit filed against them by a creditor. Their options are now very limited and all of the money they paid toward their debt through the debt relief service was wasted.

Avoiding Debt Relief Scams

The good news is you can avoid debt relief scams by educating yourself before signing up.

You should never jump into a debt relief plan without careful consideration and research. It’s also important to realize that if something sounds too good to be true it probably is.

The best thing you can do to protect yourself is to review your debt relief options and know the signs of a scam. In most cases, there are warning signs and if you know what to look for you can avoid problems.

What are the warning signs of debt relief scams?

Upfront Charges

If a debt relief company requires service fees up front before they do anything for you, it’s probably a scam.

Companies providing legitimate debt relief will settle your debt or make other beneficial arrangements before asking you to pay anything. You’ll also know what you’ll be paying before agreeing to an arrangement. Make sure all fees are clearly explained and that you know what you’re getting into before signing any contracts or handing over any information.

The FTC has actually taken action against upfront debt relief fees to protect consumers, so any debt relief service provider asking for a fee before they do anything might be breaking the law. You can read more about it at Bankrate.com.

Guarantee of Debt Elimination

It’s impossible for a debt relief company to guarantee an end result before they begin working with you. The best debt relief providers understand that every situation is different. They can promise to improve your situation, but there is no way to guarantee your creditors will agree to any sort of program until you begin working with the program.

Look for a program that offers concrete details about what they will do to improve your situation and avoid ones that swear they will “eliminate all of your debt” or “settle for pennies on the dollar” with all of your creditors.

Requiring You to Cease Contact with Creditors

Debt relief programs that demand you stop contact with your creditors are usually problematic. Working with a debt relief program does not create an automatic stay like bankruptcy does, so debt collectors are not legally obligated to cease contacting you. Unfortunately, some debt relief providers make it seem as if this is the case and encourage debts to avoid contact with creditors. Their goal is to create a barrier between you and important information you need to know to avoid a problem getting worse.

If a debt relief company tells you to stop speaking to your creditors or makes it seem as if this isn’t allowed, be wary. It can be a sign they are trying to scam you.

If you’d like to know more about debt relief services or you’re looking for an option that is better for you, we might be able to help. Contact the Law Office of Robert M. Geller at (813) 254-5696 to schedule a free consultation.