How to Avoid Debt Settlement Scams
You need to be very careful while
choosing the right debt settlement lawyer and stay away from the debt settlement companies that do nothing to erase debt but just take you money. A number of debt settlement companies claim to get you debt relief but in fact leave you worse off than you started.
It is recommended that you seek the help of a debt settlement lawyer not the high-priced debt settlement companies that in fact do nothing to help you get debt relief.
Debt Settlement programs from scam companies are usually quite expensive. When you enroll with a debt settlement company, they charge you a large sum right from the start to negotiate and handle your debt accounts. In addition, you have to pay a monthly service fee to these companies. However, the fees may vary depending on the type and amount of your debt.
Debt settlement companies are a business just looking to make money and
debt settlement lawyers are bound by the law and are trying to help you.
Major Problems with Debt Settlement Companies
A major problem with the debt settlement companies is that, they don't ask your creditors to stop all interest, late fees and over limit fees from accruing. Thus while the settlement negotiation is on, it will result to continuous growth of debts as late fees and added interest rates. Thus if a creditor sues you, there is a high possibility that you end up with a larger debt amount.
These companies do not reveal to you clearly how the debt settlement program works before you sign up a contract with them.
A qualified debt settlement lawyer will go over all the details of how the process works and will use the law to get you debt relief.
Aside from qualified debt settlement lawyers, there are plenty of operations calling themselves legit debt settlement companies. These debt company scams prey on debtors by promising relieved debt and empty their pockets forcing payment of outrageous fees.
If it seems too easy, it is probably a scam
Some signs that a debt settlement company is a scam include:
- Offers that are unrealistic
- The company calling you too much
- Companies that offer vastly different services from others
- Large up front fees
Some Other Warnings Why Debt Settlement Lawyers Are Safer
Watch Out for the Time Period On Scams
By stretching a debt settlement payback plan farther than three years you’ll never receive the full benefits that you were told in the beginning because of interest. In other words the percentage of money you’re saving on the original debt decreases when you enroll in a program that has you paying for four or five years because the debt amount drastically increases.
Financial lawyers who specialize in debt will make sure your payback period is in the best time possible to give you debt relief.
Watch Out to Make Sure the Collections Calls will be Stopped
One of the negative aspects of debt settlement is that you do need to fall behind in order for these creditors to be willing to accept less. While falling behind you will get barraged with calls from collection agencies. Once the collector has been notified but continues too contact you directly then the collector becomes subject to a potential lawsuit.
This is simply why a debt settlement lawyer is better than a company that can be a scam. If a representative from a non-attorney based debt settlement company tells that they can stop the collections calls ask them how and why the collector has to abide by what the debt settlement company claims.
A good place to start is to check the Better Business Bureau. Next thing to consider is how long the company has been in business. A general rule of thumb is to look for a company to have been in business for over 10 years.
Still, a qualified debt settlement lawyer is always a much better, safer choice. The lawyers have gone through extensive training, not just opened up a business and promised to erase your debt.