Before you decide debt consolidation is for you, make sure the company you select is not a scam artist. Debt is a huge problem for many people today and so there are many looking for answers to their problems. So to serve the market, debt consolidation companies have made it their business to swoop in to fill the vacuum. So before you look into debt consolidation make sure the company you find is not a scam artist.
Since independent debt consolidation agencies became mainstream businesses, this area has attracted many scam artists. Whenever something good comes along it seems that there is always a downside. Let’s face it, desperate people often turn to people who turn out to be dishonest crooks who are only looking for the big bucks.
So how do you sniff out a debt consolidation scam? First, know that every letter or advertisement that claims to want to help get out of your debt situation does not.
Let us imagine for a moment that there is a man who has gotten a little to deep into debt. He wants to get out from under his bills, so he seeks help from one of the debt consolidation companies that calls him on the telephone. They tell him that they can get his debt settled for a fraction of what he actually owes.
So our imaginary man decides to work with them and enrolls in the debt consolidation program. According to his debt consolidation company, his creditors agreed to one-third of the price he owes, paid over a six month span.
Our imaginary man makes his payments, starting with a lump sum at the beginning. He thinks everything is fine until he starts getting calls from his credit card companies. They tell him they still want their money. Our man is confused because he’s been making payments to his agency. When he calls the toll-free number for the agency all he gets is an answering machine.
Don’t let this be you. If you need help and are serious about working to lower and eliminate your debt ask these questions of anyone you are thinking of working with on your debt consolidation:
- Tell me about your company and what you can do to help? Any company representative that is not willing to give you thorough information about what they do is a glaring red flag. A company that wants to do honest business won’t mind telling you what you want to know.
- If they imply that they can get information removed from your credit report, slam the door or hang up. It’s a lie.
- Also, anyone that guarantees a debt reduction is out for your money and should be avoided like the plague.
- Ask how much for their services? There will be a charge but not a substantial one. The initial consultation is usually free or a low fee.
- Beware of hidden fees for processing and other things that can be tacked on.
- What are their options for handling debt? Any company that only pushes debt management programs in lieu of credit counseling or payment plans might be up to something. They might be getting kickbacks to push a program. Avoid that!
You can always check with the Better Business Bureau to see if a particular company has been investigated.
Avoid debt consolidation scams. Never believe the hype. Do your homework before signing up with any debt consolidator.