Consumer debt counseling - Be aware of fake artists
Many of us utilize the services of debt counseling services. But have you checked if the agency you are using is a genuine one? Believe it or not, there are many consumer debt counseling business whose prime objective is to take away your hard earned money . Thats it. Whats more, they are not even qualified to provide you and advice but they pose to be experts in the subject. Be careful when you choose these agents. Learn to seperate the imposters from the authentic ones.
As these companies know that you have big debts to pay, they will offer to take care of all your worries and pretend to be ‘Gurus’ in the field of debt counseling. At times you will be surprised with their body language suggesting that the only aim in life is to help others and that money is a secondary objective to them. While this is definitely good to hear, it may not be all that true. So when they tell you that they have the solution to throw all your debts to the wind, scout through the details very carefully.
Let us take a look at how these debt counseling companies work. This will help us understand what to do to avoid being scammed by their promises?
The genuine ones can do the following:
- Real debt counseling services are able to consolidate high loan interests as well as balance accounts.
- Allow you to make late credit accounts current with no back payments necessary.
- Have the capacity to absorb late fees and those that are already over the limit could be stopped.
- They usually have a solution for clients to still be able to keep their credit cards for essential expenses such as travel, business or any type of emergencies.
The fake ones
- Many of these claim to be non-profit groups but profit is their sole motive
- Look for cases like AmeriDebt, which the Federal Trade Commission has fortunately been able to shut down. This was done after varios complaints from customers.
- These companies usually scam debtors by telling them they could easily get out of their debts even with no upfront payment fees. And then they deceived their customers into pooling in contributions voluntarily. Such paments were finally utilized for profit purposes while customers found themselves immersed in further debts instead of relief.
In short, additional debt further reduced the credit rating of customers while bill collectors started taking legal action fr non payment. As a result, the government had to intervene and currently, all accounts at AmeriDebt have been transferred to a reputable agency via a bankruptcy third party trustee.
Payments will be lowered - this is one claim most of the scamsters use to interest more clients. Clearly understand that such claims made by debt counseling services are illegitimate. Payments can never be lowered unless under refnancing of mortgages. The only aspect in debts that can be lowered are interest rates.
Again, never ever agree to debt counseling companies that claim to offer final settlement of debts. No sane person would agree to waive of your debts. Its his hard earned money afterall. So also with creditors. They are not social service organizations. They depend on this money for bread and butter as therefore cannot afford to let go of this money loaned to you even if they want to. Instead of involving company in the first place, simply pick the phone up and call your creditors. They will be more than willing to negotiate with your demands.
In short, dont be duped by the dubious moves of such companies. learn to identify frauds and stay away from them. Better still try to avoid the debt trap inthe first place.
Article by Nakagava Ltd., creator of PiggyBob™, the first truly user friendly personal finance and appointment scheduling software. PiggyBob™ is an extremely convenient tool to help you keep track of your income and expenses, plus a very useful printable calendar to record all important events in your life. Downloand now
