Personal debt relief assistance programs through credit counseling agencies or debt settlement companies have been used by consumers as a way to either find more financially savvy techniques that can be implemented in their personal financial life so that debts become less problematic, saving and future financial goals can be accomplished, and consumers can generally avoid difficulties related to living outside of their means or allowing debt to simply pile up continuously. However, there are some individuals who have been taken advantage of by scams or fraudulent debt relief assistance companies, and as a result, consumers must understand that there are certain aspects of both credit counseling and debt settlement that needs to be explored and when a particular agent or business offers these services, consumers must be cautions before working with a particular debt relief company.
As an example, consumers are in a more advantageous position now than in years past, simply because the Internet can be an incredibly valuable tool when it comes to exploring counseling programs or debt settlement companies. However, education is the first step when it comes to finding debt relief assistance programs as credit counseling through a nonprofit organization is vastly different than a debt settlement program, which can have adverse affects on a consumer’s credit score. While there are also intermediary steps like debt management debt may be explored, this is usually done through a credit counseling agency so consumers must make sure they are working with an accredited counselor before they even begin the steps and know what options may be helpful or unnecessary for their situation.
While there were regulations for debt settlement companies that were passed last year, which essentially stated that an organization that offers debt settlement or debt relief services through telemarketing cannot collect upfront fees before they have even offered a service, this is one aspect of a fraudulent organization that could offer a warning for consumers. As an example, companies that offer debt relief services through other mediums, like online or through face-to-face solicitation, may be exempt from these rules but if a credit counselor or debt settlement service, or any company promoting debt relief, wishes to charge a consumer up-front before help is given it may not be the best option for a troubled consumer.
However, the FTC also suggests that consumers should be wary of companies that guarantee some sort of debt settlement, can offer to erase debts for mere pennies on the dollar, or, again, charges excessive fees and advises consumers to stop talking with their creditors, as these organizations may not have a consumer’s best financial interests in mind. Typically, consumers can usually either consult the Better Business Bureau or simply run a Google search to see if any red flags appear for a particular credit counseling or debt settlement organization, but also, when a consumer is speaking with a debt relief agent from a particular company, if this individual or organization doesn’t offer specific, one-on-one assistance, or makes any of the claims listed above, it may be a sign that this is not the place for a particular consumer.
While many nonprofit credit counseling agencies do charge fees for their services, this will usually be once they have given advice, helped a consumer set up a debt management or settlement program, and when it comes to dealing with creditors, consumers must continue to meet these obligations and once their counselor has stated an agreement may have been worked out, consumers are often prompted to contact these creditors to make sure that everything is as it has been stated from the counselor.
It’s understandable that debt relief assistance programs are greatly needed by many consumers at the present time, as various factors have still left many in a difficult financial position, but researching specific companies, their accreditation, and looking for any customer reviews, as well as avoiding companies that show blatant signs that they may not be the best route for debt relief that a customer may find, should help consumers avoid the majority of these fraudulent organizations and escape potential scams that could cause financial trouble in their lives.