Debt Free Solutions – Learn How To Prevent A Debt Settlement Scam

Written by admin on April 14th, 2011

Among different debt free solutions to choose from, debt settlement is an effective one that everyday consumers choose to go with. That’s why many criminals have smartly put together debt settlement scams to attract  people interested in this financial option. Thus, it’s important that you learn how to spot a fraud when you see it.

Needless to say, this isn’t an easy thing to do, but it isn’t impossible, either. If a company, for example, is new to the field of debt settlement, chances are you won’t be able to get any referrals from other consumers that have tried it. This doesn’t necessarily mean the company is a fraud, but unlike a company that’s been around for years, there are more risk you’re taking by trusting your finances to it.

This is just one of the many ways you can prevent falling into a trap. Below is a list of four different ways to help you spot a possible debt settlement scam before signing any paperwork and becoming a victim. However, just because a settlement company presents any of the traits mentioned below doesn’t mean it’s a fraud, but it’s an important sign to try to contact another company that doesn’t has any of these characteristics and, as a result, is less likely to be a scam.

What Are Some General Traits Of Debt Settlement Scams?

1) Instant Enrollment

Reliable debt settlement companies will tell you that you need to be approved before enrolling in their program. This is because there are different variables that’ll determine if debt settlement is a viable option for you or not. For instance,  student loans can’t be settled by a debt settlement company, and it’s their duty to tell you so.

As a result, if a company automatically enrolls you in their program, they’re not proceeding in a professional way. You may not even qualify for debt settlement, yet instead of carefully examining your case they’re just taking your money. What if they can’t settle? What’ll happen to the money you pay every month to the settlement company? Save time and money choosing a debt settlement company that’ll only enroll you in  their program after they’ve examined your paperwork.

2) Long Programs

Be sure to ask the debt settlement company how long their program is. If it lasts for more than five years, don’t trust your business to them. Once again, the company may be legitimate, but what they’re not telling you is that the longer the program is, the more chances your creditors will sue you. If the company doesn’t bring this up and instead mentions how low your monthly payment will be thanks to stretching out your program, don’t hire them. They’re not being completely honest with you.

3) Misinformation

If you bring up your concerns about hurting your credit score and the company explains they’ll take care of it, they’re lying. If you mention your fear of being sued by your creditors and the company says that’ll never happen, they’re also not telling you the truth. Keep this in mind: first, your credit score will suffer in the short run and there’s nothing the settlement company can do about it. Second, although creditors rarely sue once you enroll in a settlement program, they always have the right to do it. So if a company is making any of the former statements, they’re not telling you the truth, and your finances are too important to be trusting them to a business that’s hiding relevant facts from you.

4) Only Advantages

Don’t trust a debt settlement company that only mentions the benefits debt settlement will have on your financial life. What about the cons we mentioned earlier? They exist, too, and you must be aware of them. No alternative to getting out of debt is perfect, and don’t trust anyone that tells you there’s one that is. All options to put your finances back on track have pros and cons, and the company you hire to help you along the way must inform you of both. Otherwise you wouldn’t be making an informed decision.

Do Your Research

If you’re considering debt settlement as a possible way to get out of debt, research different settlement companies as much as you can. Visit their websites, call and speak to a Debt Consultant. Do your homework and compare notes. Which companies sounds more reliable? Which one is backed up by TASC and USOBA to guarantee that their practices are legitimate?

Debt free solutions can be an appealing way to get back in control of your finances, but make sure you trust your business to a company that’s legitimately using an option such as debt settlement to help you along the way.

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