Debt Relief Agency Sound to Good to Be True? It Probably Is

As a debtor, one of the last places to seek advice and information from concerning bankruptcy and bankruptcy alternatives are debt relief agencies. Granted, not all debt relief agencies are predatory in nature, but a sizable number are, and furthermore, any debtor can obtain better information and better results from either a government-counseling program or a bankruptcy lawyer. Not only do debt relief agencies often offer debt relief options that are simply not feasible, but also, they misdirect debtors away from action that could be taken in their best interest, not to mention some companies outright steal money from their debtor clients.

The following article outlines some suggestions, tips, and red flags that individual debtors should be aware of when dealing with debt relief or credit counseling companies. This information is widely disseminated by the federal government, most notably the Federal Trade Commission, not to mentioned countless reputable media and consumer advocacy groups. In short, the only method a debtor should employ to rectify his or her debt situation should be through consulting with a lawyer.

Common Red Flags Seen in Debt Relief Scams

The sheer number of consumers facing debt issues, alongside a drastic spike in the number of bankruptcy filings, has led many companies to take advantage of the demand for help, counseling, representation, and negotiation assistance regarding debt. These companies often charge upfront fees for helping debtors, while making promises to repair credit, reduce, or eliminate debt, and any other number of promises to the debtor. In short, the overwhelming majority of these promises will not be fulfilled or will fall far short of the debtor’s expectations. The following outlines some indisputable red flags that should warn consumers a debt relief agency’s claims are too good to be true:

Any debtor should consult the Better Business Bureau or other local government consumer advocacy groups about a given company.

If a company demands money upfront without providing services, the consumer should extremely concerned.

If a debt relief agency fails to provide debtors a detailed outline of their legal rights without requesting payment, a red flag should be raised.

If a debt relief agency suggests a debtor attempt to circumvent the law, or in any other way misrepresent his or her identity or commit fraud, the company is clearly not reputable.

Any agency advertising methods to get out of debt instantly or easily are grossly exaggerating the process required to eliminate debt effectively. This process takes time and requires diligent financial behavior from debtors. In short, there are relatively no quick fixes, unless a debtor has the cash on hand to repay debts immediately and in full. In this case, why deal with a debt relief agency? Contact creditors directly.

In light of many scams and other unscrupulous ventures, a wide number of government backed or reputable non-profit debt relief and counseling companies exist. As a debtor, the first place to check is with these entities and companies.

In almost any case of debt relief counseling or help, an initial consultation should cost nothing. If a debtor cannot obtain a good idea on what services a company can provide without paying for this information upfront, the company will never be in their best interest.

Take the time to read the paperwork, especially concerning potential increases in costs, fees, or other charges that may arise during one’s work with a debt relief agency.

Be able to confirm that a debt relief company has taken the action they have stated they have done. Many times, this will require a debtor to contact their creditors directly, to confirm payment or receipt of legal notices.

Getting Legal Help with Dealing with Debt Relief Agencies

The reality of debt relief scams is that most consumers, in hindsight, can easily recognize their vulnerability and the clear signs of a fraud being perpetrated. However, in light of the stress of impending debt obligations, coupled with a lack of knowledge about how debt laws and bankruptcy work in a given state, many debtors place trust in companies, which would have otherwise been avoided by the debtor. As a debtor, the first step to recovering financially will be through gaining accurate and case-specific legal information from either a lawyer or federally-sponsored credit and debt relief counseling agency.

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