Spotting Credit Negotiation Scams

Before considering bankruptcy, consumers are encouraged to seek other debt relief options first. The reason is simple: to resolve debts as quickly and easily as possible. However, this can be easier said than done. For one, there are many non-reputable companies operating to victimize those in need. Managing debt burdens is serious business, so be sure your debt relief company is legitimate.

Red Flags

Anytime you are allowing a third party company to represent you in debt negotiations, you should keep an extra cautious eye out. After all, this is your debt trouble they are attempting to resolve and you want to make sure things are done right. Any of the following should be considered a cause for concern:

• Charging fees for services upfront or before services are rendered.
• Requiring you to sign documents giving them power over your negotiations or debt accounts.
• Not allowing you to contact your creditors directly.
• Encouraging you to purposely miss a payment.

Remember that you maintain the right to negotiate with your creditors directly at any time, and for free. While a third party company may take the edge off your negotiation, there is something to be said for handling things yourself. If you feel you cannot represent yourself, consider hiring a debt lawyer to represent you during credit negotiations.