Many companies send offers
to help you solve all of your debt problems quickly for a low fee.
Sounds like a good offer, right?
WRONG. Unfortunately, if
an offer seems too good to be true, it usually is. Many of the companies
promising to help you with your debt problems will actually cause more grief in
the long run. Learn how to spot the signs of a scam.
Signs a "debt help" company is trying to pull a
It promises to remove all of your
debt. FACT: Debt does not disappear unless you pay it off.
Any company that says it can get rid of your debt is trying to rip you
It encourages you to take out a new loan without
reviewing your financial situation. Though many companies offer
legitimate debt consolidation plans, a company that does not fully review your
financial situation but tells you immediately to take out a loan is most
likely trying to scam you. Likely, they will charge you their loan fees
and interest on top of your current debts.
It requests substantial monthly service
fees. If you're already struggling with debt payments, you should
not add to your expenses by paying someone to manage debt that you can work
out yourself or in consultation with a free or low-cost credit counselor
It tells you to stop making payments or contact
your lenders. FACT: Often, lenders are willing to work out a
repayment plan with you. If the company tells you not to contact
lenders, it might be withholding valuable information.
It asks you to sign blank forms or sign over your
property's ownership. NEVER sign blank paperwork.
sign agreements that you don't understand.
Unfortunately, there have
been cases where homeowners think they are signing documents to help repay
their debt but are actually signing over the deed to their
Remember: If the company is unwilling to explain
the paperwork or answer your questions, do not do business with them.