Reduce Your Debt without Getting Scammed
When you find yourself knee deep in debt, looking for a way out, debt relief companies can help you to dig yourself out of a hole.
Debt reduction is a profitable business. That is why you will find hundreds of such companies advertising on the radio and TV offering to help cut your debt by 50, 60, even 70%. Some of these companies are reputable, but as with any profession where there is lots of money to be made, you will find a lot of scam artists in the business.
So how can you tell which ones to avoid? There are certain signs that are almost sure-fire hints that you should keep away.
Favorite Cop-Out Words That Many Debt Reduction Companies Use
Any debt reduction companies promising that they can take your debt and get the creditors to discount them 70% of more are suspect. These pitches are usually come-on pitches designed to get you into the door where they can sell you other services. Not all creditors are the same. No debt reductions company can predict how much they can get a creditor to reduce your debt – if they can get him to reduce it at all. In fact you will probably find that most of these types of companies will use “weasel words” to negate their implied promise. You will hear terms such as “UP TO” 20% discount, you “CAN” save up to 50% on your bill, and so on.
Beware Debt Relief Companies Charging Huge Signup Fees
Be careful of firms that charge huge signup fees or long term contracts. It’s fine for companies to charge a fee for their services, but most legitimate companies will charge you reputable fees. And long term contracts are nothing more than an attempt to make you part of their profit center by collecting monthly fees from you. If a debt reduction company is doing its job, it should not take three to five years to get you on the road to having your financials back in order.
Can They Really Prevent Lawsuits?
Be especially careful if their advertisements promise that they can stop lawsuits. If a creditor is determined to sue you, there is not much a debt reduction company can do to stop them. Sure they can try to negotiate with your creditors – and they may even be successful. But they cannot guarantee that you can escape a lawsuit. And a reputable company will not make such a guarantee.
Is Your Non-Profit Debt Reduction Company Really Non-Profit?
It also helps to be aware that many debt relief companies flat out lie about the services that they provide. For example, some claim to be non-profit, but are really nothing more than lead generating companies for other profit making organizations. Many also lie about the cost. The use a low ball offer to get you in and then bait and switch you to another offer.
Do your due diligence. Look for companies that have a long track record of helping people to reduce their debts. Also look for referrals and references from friends and lawyers. Many communities also have offices where they can point residents to local, community resources that can help them to get back on their feet. There are good debt reduction companies out there, but you have to look.