Scams are everywhere these days, many of which are targeting people struggling with personal or mortgage debt issues. Fraudulent foreclosure help and debt settlement scams lurk around every corner from a legitimate company offering real help. A new development in debt scams is aimed at soliciting consumers looking for short term loans when they need help, specifically those who may have already filed bankruptcy in the past.
While having received a debt discharge in Chapter 7 is beneficial for those who experienced a financial hardship, it does leave them more vulnerable to certain risks. Although it is not the case for everyone, securing credit and loans after a Chapter 7 can be challenging for some. In such instances, these consumers may be targeted by scammers offering quick cash through easy payday loan services.
Typically, these scams are run through online websites where the consumer can apply online to receive a quick loan. Besides interest rates upwards of 75 or more percent on the loan the borrower may also find that they are trapped in an invalid debt, meaning the loan was never legal to begin with. The problem here is that when these debts become collectable, the fraudulent company can violate rules and engage in unfair debt collection practices to get their money. Borrowers will have a difficult time finding help from these debts due to their illegal status.
Another variation of this scam is for post-bankruptcy consumers to be targeted for collecting on a debt that was never borrowed to begin with. The scammer contacts the consumer stating the debt was not part of their original bankruptcy can and has since become collectable. Often threatening to damage credit or obtain a lawsuit, these fraudulent companies scare consumers into paying for a debt that never belonged to them.