Beware of Debt Reduction Scams

Do you want to cut your ties with the bondage of debt? Is the cost of bankruptcy too much for you? If your answer is yes then a debt reduction program is indeed a good option for you. In today's socio-economic scenario, credit card debt is very rampant. Taking advantage of the situation, a large number of debt management firms have popped up all over the internet. If you browse through the internet you will come across a lot of sites promising to offer legal assistance to the debt stricken people. If you really feel that the burden of your debt has pushed you into a tight corner then of course you can look forward to the help and advice of any debt management firm. But before enrolling into any program promoted by those firms, you have to check the authenticity of their programs on different parameters.

Debt reduction firms may bombard you with loud promises but as a responsible citizen it is your duty to check if their promises are genuine. Fraudsters are always trying hard to amass your money and at the same time the cost of bankruptcy can also prove to be disastrous for you. So you will always have to proceed with measured steps, keeping your eyes open.

First of all, check whether the company you are going to enroll with is accredited by the BBB (Better Business Bureau). When it is certified by such a reputed agency, you can put your confidence on them.

Next, check the track record of the firm regarding their debt reduction programs, their success stories and also the consumer's feed backs. It will encourage you to keep faith on their expertise in handling diverse client issues.

Now, I will list down a few things that you should consider as a negative sign of any debt settlement firm.

Stay miles away from those companies which ask you for advance payment as their enrollment fees. It is not safe to rely on a company that charges you money even before starting with their services. The representatives of that firm are supposed to negotiate with your creditors and restructure your repayment schedule as per your feasibility. And they may do it by opting different solutions like debt settlement, debt management and debt consolidation program. But if they charge you prior to initiating any of those programs it will be unwise to believe them.

Do not believe if you are told that the settlement company will lessen your credit debt by 60% to 70%. In most cases, the arbitrators of any firm try to reduce your spiraling interest rates and other late fines and penalties. But if they make such a high claim even before assessing your financial status, it just indicates that they are less than a trusted party.

You should also take it as an inkling of scam if they claim to have known some secret laws that will eradicate your financial obligation.

You can suspect their honesty if they promise you that they would prove the credit contract as an invalid one or the credit issuer as an unauthorized party.

No settlement agency can actually ensure you that you will never face any embarrassing calls from your creditor in future. Now if any such promise is made to convince you, it is better to avoid those companies.

They may urge you to stop paying money to your creditor and all your money is put into their trust account. But in many instances debtors have been shocked to find that most of their money was absorbed by the settlement firm as their hidden charges. No money has reached their creditors which they had sent in good faith. Such cases will only aggravate your credit company to pursue their collection effort more relentlessly.

Finally, it will be unfortunate when you discover that you have strapped yourself into more debts after enrolling in their debt reduction programs.