Debt Relief Scams: You can be a part of it too!

The consumer debt burden has reached an all-time high and it won’t be surprising if you find yourself in a fix too! Whether your debt burden is a result of illness, overspending or an accident, your efforts to secure solvency can turn out to be an uphill task.

Now, today, debt relief ads are quite in vogue, considering the staggering number of debtors struggling with their financial obligations. Very tactfully pitching the promise of debt relief, what these ads actually don’t tell you is that “relief” and “bankruptcy” are often treated synonymously here. Now, everything works like this. At first, the ads promise to deal with any of these needling issues associated with your burden— foreclosures, creditor harassment, garnishments and tax levies or repossessions. Their chief aim, apparently, is to weed out your debts by focusing on these issues. However, what they often “DON’T,” tell you is that you might as well be required to file for bankruptcy. Now, though bankruptcy is often treated as a means to deal with several financial problems, it’s actually the last resort.

Why is bankruptcy considered to be the last resort?

Simply owing to the fact that bankruptcy wields a long-term negative impact on a person’s creditworthiness…. With a bankruptcy mentioned in your credit report—you can find it hard to qualify for jobs, loans, and insurance. And, yes the bankruptcy can stay on your file for a good 10 years. You might have to shell out a substantial attorney fee in order to get rid of this financial stigma (i.e. Bankruptcy).

The Federal Trade Commission thus requires you to carefully consider ads guaranteeing the cessation of credit harassment, wiping out all your debts or for that matter keeping your property.

What you should watch out for

The ads which mislead you like this are often termed as debt relief scams. So, make sure that you are weighing the pros and cons thoroughly before signing up for any of the related “programs”. Obviously, there are feasible ways of getting out of debts and a little bit of education from your end would help you with that

So… how do you wriggle out of your mounting debts? Here’s how:

Your first responsibility would be to hold talks with your creditor and seek a loan re-modification. If nothing works out there, you can contact a credit counseling service. Their chief function is to work along with your lenders in readjusting your loan repayment plans so that it becomes easier for you to pay off your debts. They are nonprofit organizations which usually charge very little for their services (a meager fee that you would have to deposit every month).

A second mortgage would help you consolidate your debt, but they would definitely require you to place your home as collateral. You can file for Chapter 7 or Chapter 13 of bankruptcy— both of which have different implications.

Report scams

You do have the right to report unscrupulous ads to your state attorney general or to the FTC (Federal Trade Commission) or to the Internet Crime Complaint Center of FBI.