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Too Many Debts
Beware of Debt Counseling Frauds
Everywhere in the world today, people are becoming submerged in
debt. Everywhere you look, it is possible to purchase today and
pay tomorrow, consumers are steadily falling into this trap
everyday, and before they know it, they are so far in debt they
are unsure how to get out. This is where debt counseling comes
in; however you need to be made aware of debt counseling frauds.
Some are only in place to take your money.
Legitimate debt counseling companies do not claim to be
not-for-profit if they are not. There have been cases where a
company has claimed this and ended up swindling their client's
money. There are ways to protect yourself; you should check a
debt counseling company's reputation thoroughly before investing
your time and effort into them.
Never conduct business with a company that requires any upfront
fees or asks you for voluntary contributions. This is a red
flag, legitimate debt counseling companies advise you on money
management, budget development, debt and educational material
and occasionally workshops.
Essentially, it is none of their business regarding the details
of your situation or requires you to be approved. They should
discuss your financial situation and help you in developing a
plan to eliminate the problems.
You can also check your local government agency or better
business bureau, to ensure that they are indeed legitimate and
no complaints have been filed against them.
The other things that will tell you rather or not a debt
counseling service is legitimate include the following things.
If they promise lowered payments, leave, only interest rates can
be lowered not payments. If they ask you for your account
numbers prior to giving you a quote, this is not necessary at
all. If they group the quotes together instead of giving you a
breakdown of how each creditor will be handled, this will leave
you with no idea of how long it will take to pay off each
account.
There are also questions you should always ask when choosing a
debt counseling service. These questions should include charges
for educational material, a disclosure in writing of fees that
are charged, if they are properly licensed to do business in
your area, what will happen if you cannot afford their fees,
what type of services do they offer and if the counselors are
certified and who certified them. This is your money and your
financial well-being, do not leave any stone unturned.
There is a new bankruptcy law that makes filing bankruptcy
harder for everyone. To file a chapter 7 will be nearly
impossible if you are currently employed. They have formed a
test that you will have to pay showing that your income is less
than the median income for your area. Along with these new laws,
it has become required to obtain debt-counseling services when
filing bankruptcy.
Choose the debt counseling company very carefully and ensure
they are legitimate. You do not want to cause more harm or
damage to your credit, so choose reputable companies wisely.
About the author:
Ethan K. Roberts writes about several different subjects not
limited to debt
counseling. More info at US debt counseling program and Consumer Counseling Debt Services.
Written by: Ethan K. Roberts
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