How to Avoid Questionable Debt Consolidation Programs

December 30, 2009 by  Filed under: Debt 

Being in debt is not only an annoyance, but can be depressing as well. To some, a couple thousand dollars owed is a big debt. Others have debt that is more than a new car is worth. This debt leaves people vulnerable and open to being cheated out of their own money.

Many people look for debt consolidation services only to find themselves worse off. Supposed consolidation companies require fees, up front, that people willingly pay. Only to find out that their debt just increased. Numerous individuals have been hurt, severely, by these scams, and some have even been forced into bankruptcy.

The Federal Trade Commission is working hard to put a stop to these debt consolidation scams. They have put severe penalties on companies who have broken privacy laws and rights. On top of this, the FTC has put together a short list of things, for individuals with debt, to keep their eyes out for.

One of the first things you should know is to never trust anyone you have not done research on. Whether you are making the call, or being called upon, do your research. There are many companies, out there, who focus on debt consolidation, yet they are nothing but frauds. Some of these companies are non-profit organizations with names that sound reliable, but in essence, are not.

Secondly, never trust a company that makes any type of guarantee. Nothing can ever be guaranteed, especially when it comes to debt; therefore, if they are guaranteeing results, they are lying. Additionally, pay attention to their forcefulness in their calls. The more forceful they are, the less likely they are to be legit.

Cover your back. Get a hold of your creditor and ask if they will even work with ABC Company. You can also contact the Better Business Bureau to find out what information they have on said consolidation organization. Also, before signing anything, read every single word. These are not documents you want to skim; it will get you in trouble.

Do not send any money to the debt consolidation service until you know, for a fact, that your creditors are working with them. You should receive some sort of statement, which your creditor has approved, that they will move forward with this form of action. Without this, you should do nothing. Possibly obvious, but no less important, is monitoring all activity with the debt consolidation company.

Clearing yourself of debt is not an easy task. Take your time finding the right company. Whatever you do, protect yourself from debt consolidation scams.

Author Lucinda Pryse enjoys writing about various topics, including fashion, health, and education. Visit her latest web site at where she shares tips about buying earth spirit shoes.

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