The Hazards of Debt Relief Scams

Posted on December 20, 2013 at 8:01pm by

Our Kansas City Bankruptcy Attorneys Want You to Avoid Fraud

Some debt relief methods are simply too good to be true. Anyone considering Chapter 7 or Chapter 13 bankruptcy has likely considered the possibility of a debt relief program, with some scammers wanting to take advantage of those in desperate debt situations and abuse their already shaky financial status. Fraudsters make promises they cannot keep and typically provide no assistance, or they may even make the situation drastically worse. Fortunately, learning about some common debt relief scams can allow you to steer clear of them.

What Are Debt Relief Scams?

A debt relief scam basically offers to alleviate debt or improve your credit situation but does not fulfill that promise. Not all debt settlement, debt consolidation or credit repair companies are fraudulent; some are legitimate businesses. However, it is extremely important that a person fully researches the practices and reputation of any debt relief company prior to agreeing to work with them. In many cases, personal bankruptcy will offer many more benefits and much less risk than these types of companies.

Some examples of debt relief scams include:

  • Debt settlement scams – Not all debt settlement firms are scams, but many of these companies offer to negotiate with creditors for a settlement as well as slash your debt drastically. However, huge cuts for debt owed are often impossible. Fraudulent companies often make these promises or guarantees without knowing about the specifics of your situation first. They typically charge exorbitant upfront fees in addition to advising you to stop communicating with your creditors.
  • Debt consolidation scams – This type of potential fraud often involves a company taking money directly from their victims’ bank accounts and offering to pay their debts with it. These companies charge significant fees for doing nothing more than pulling money from a bank account and collecting it. Sometimes the consolidation company does not even attempt to pay creditors back with this accumulated money. They frequently utilize post offices boxes as addresses, which can make it difficult for unsatisfied customers to track them down. They also may require the customer sign forms that limit their rights to sue as well as do not respond when customers want the withdrawals from their bank accounts to stop.
  • Credit repair scams – These companies falsely claim that they can remove harmful information from your credit reports. This claim is simply untrue. Accurate credit report information cannot be removed from credit reports. However, individuals do have the right to contest information found in their credit reports directly with the credit report agencies.

How Do I Avoid Debt Relief Scams

The best way to escape debt relief scams and to begin making decisions about your debt is by speaking with an experienced Kansas City bankruptcy lawyer. Our attorneys have extensive knowledge about resolving debt issues, and we can give you the information you need to decide if bankruptcy is the best decision for you. We evaluate each situation and can provide debt-stricken individuals with an effective plan to get their financial situations under control again. Our Kansas City bankruptcy attorneys are always available to help. All you need to do is contact The Sader Law Firm at (816) 561-1818 for free attorney advice about bankruptcy.



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