Fake Debt Consolidation Scams To Be On The Lookout For: Part One

If you are being inundated with phone calls from debt collectors demanding money, and advertisements that blare “get out of debt now,” debt settlement and debt consolidation companies might be looking pretty good right now. With debt settlement and consolidation centers, you merge your debts and pay a portion of the total. However, many of these firms might be just too good to be true.

Any debt consolidation place that seeks to satisfy your debt for “cents on the dollar” should be considered dubious. After all, it is impossible to make and keep a promise like that without being knowledgeable about the details of how long you have owed the money, how much money you owe, and to which creditors. These debt consolidation firms aren’t aware of your past payment history. They don’t know the creditor you owe. Also, each person has different finances that can be used to satisfy their own debts. You can never make such an assumptive statement.

Debt settlement centers that guarantee that you will be debt free in three months should also be taken with a grain of salt. Again, the company is unaware of how much you owe, or who you owe it to. Additionally, some obligations, such as student loans, child support and back taxes cannot be paid in a debt settlement plan.

Businesses that say that you can’t get their assistance without paying an upfront fee or deposit might be less than reputable. While some debt consolidation companies might accept an upfront fee of as little as fifty dollars, typically, the debtor pays the debt settlement company a part of the debt owed, often fifteen percent, for negotiating the debt.

Generally, the firm will negotiate a payment between you and the businesses and people you know and will accrue enough money to make that payment. The debt settlement company will hold on to the cash until you reach the settlement amount.

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