Avoid Debt Elimination Scams

Every day, especially if you read a lot of websites about finances, you are probably bombarded with phone calls, emails, and other forms of communication about debt elimination. It sounds appealing at first: Pay about 15 to 20 percent of your debt off, and then the rest goes away and creditors leave you alone. But, let me assure you, this doesn’t work.

With the economy we are currently in, a lot of these companies are trying to appeal to the masses. Why? Because debt is the reason the economy is in the state it’s in. The average American has thousands of dollars of debt. So, it’s the basic rule of supply and demand: There’s a need, people see a way to scam people with it, and then they go for it.

Now, I’m not saying that all debt reduction is illegitimate. But, here’s some things for you to look into and/or do if you’re considering using one of these programs:

-          Do they claim reduction, elimination, or counseling? There’s a difference. Usually debt reduction and counseling programs help you to make a more manageable budget, assist you in consolidating your debt, and teach you to manage your money better. Elimination programs try to make you believe that you can just make your debt disappear by paying some of it.

-          Do they have proof of it working? If it’s an elimination ploy, they’d have to go to court to settle these debts. If that occurred, you’d be able to get the records; civil court cases are public access. If the company claims that they don’t have documents because “that violates their customers’ privacy,” then they’re probably scamming you.

-          Check out the BBB. Checking out any business you trust any form of money or investment in is always wise. I’d rather take the five minutes to look them up on the BBB website than waste a ton of time on a less-than reputable company.

-          Check out their websites. A lot of companies have public forums, or check out other websites about these types of companies. You’ll find out quite quickly which ones are legit and which ones aren’t.

The best option is to always do it yourself or find a financial counselor. If you are patient and are willing to make some sacrifices, debt reduction is a lot easier than it seems. People get overwhelmed by the amount of debt they’re in, and many times they can panic and just scramble to find the quick fix. If you do that (without answering the questions above or doing the research suggested), you could possibly lose even more money, kill your credit, or even end up filing bankruptcy. Be smart with your money and with your debt, don’t trust it to just anyone, and you’ll be able to fix the mess you’re in better than you could with the easy way out.

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