How To Avoid Debt Relief Companies From Cheating You

How To Avoid Debt Relief Companies From Cheating You

If you have no experience with a debt relief company and they guarantee you that they can get you out from under all of your unsecured debt if you will simply sign a contract with them, your fraud antenna should go up. The purpose of more and more of these debt relief companies seems to be to fleece their clients.

In just the past five or so years, literally hundreds of new, alleged debt relief companies have arisen all across the country . With the economy the way it is, debt relief is seemingly the new growth industry. But before you sign up with one, there are a few things that you should be aware of.

No company can absolutely honestly guarantee you that they can settle your debt. So, if a company makes this pitch to you in an effort to get your business, run from them as fast as you can. And run double fast if they ask you for hundreds of dollars up front and/or monthly payments with non-cancellation automatic check withdrawals.

Creating a successful debt negotiation and settlement plan with your creditors depends on a number of things. It depends on your credit history with them specifically, your credit history in general, the amount of money that you owe, their internal debt settlement practices, and so on. The thing that it least depends on is your particular debt relief company.

Verbal contracts are unbelievable. You should ensure that everything that they have promised you verbally, is written down in contract form. If something is not in writing, you have no proof that they actually made that promise. Among the items that are in the written contract, there are a few things that should be mandatory from your standpoint.

The contract should unambiguously specify that the company will send you monthly reports of all payments that they have made to your creditors. These reports, at a minimum, should include includes the amount and date paid. And, don't be shy about following up with creditors to make sure that those payments were made. And, if a debt reduction company requests that you not contact your creditor, consider this a red flag.

Any debt relief company that is totally on the up and up, will have a cancellation clause written into the contract. Read if carefully. If their contract does not have one, or if the cancellation terms are not to your satisfaction, look for another debt reduction agency.

Also, remember that fee debt relief services are not your only option as you try to reduce your debt. Many communities have non-profit debt relief companies that will be glad to work with you for a minimum fee. They are of various quality, of course. But you might want to check them out before you start to look for a fee based service.

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