Look Out For Debt Reduction Scams
by Takara Alexis
In today's socio-economic scenario, credit card debt is out of control. Taking advantage of the situation, a large number of debt management agencies have popped up all over the internet. If you browse through the internet you'll come across a lot of sites promising to offer legal assistance to the debt stricken people. If you really feel that the burden of your debt has pushed you into a tight corner then of course you can look forward to the help and advice of any debt management firm. But prior to enrolling into any program promoted by those firms, you need to check the authenticity of their programs on different parameters.
Debt reduction agencies may bombard you with loud promises but as a responsible citizen it is your job to check if their promises are genuine. Fraudsters are always attempting to get your money and at the same time the cost of bankruptcy can also prove to be disastrous for you. So you will always have to proceed with measured steps, keeping your eyes open.
Check whether the company you're going to enroll with is accredited by the BBB (Better Business Bureau). When it's certified by such a reputed agency, you can put your confidence on them. Do not believe if you are told that the settlement company will minimize your credit debt by 60% to 70%. In most cases, the arbitrators of any firm try to lower your spiraling interest rates and other late fines and penalties. But if they make such a high claim even before assessing your financial status, it just shows that they are less than a trusted party.
You should also take it as an inkling of scam if they're claiming to have known some secret laws that will eradicate your financial obligation. You can suspect their honesty if they tell you that they would prove the credit contract as an invalid one or the credit issuer as an unauthorized party. No settlement agency can actually ensure you that you'll never face any embarrassing calls from your creditor in future. Now if any such promise is made to convince you, it is better to avoid those companies.
They may urge you to stop paying money to your creditor and all your money is put into their trust account. But in many instances debtors have been shocked to find that most of their money was absorbed by the settlement firm as their hidden charges. No money has reached their creditors which they had sent in good faith. Such cases will only aggravate your credit company to pursue their collection effort more relentlessly.
Finally, it will be unfortunate when you find that you have strapped yourself into more debts after enrolling in their debt reduction programs.
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Scams related to debt reduction have become quite common these days as lot of people are taking help of debt reduction agencies in order to get rid of their debts. However, I personally believe that self help is the best help. I would suggest the consumers to educate themselves and take required steps themselves in order to get rid of the debts. Some of the methods that consumers can use themselves include snowball method (pay minimum amount toward all debts and extra toward the lowest debt balance) and debt avalanche method (pay minimum toward each account and extra toward the highest interest account).
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