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Debt Free Solutions – 6 Ways to Prevent a Debt Settlement Fraud

Debt free solutions, such as debt settlement and credit counseling, can help you get out of debt and put your finances back on track. However, in times of crisis, criminals always find ways to take advantage of people's desperation, and debt settlement scams is one of them. Thus, it's pivotal that you learn how to spot a settlement scam when you see it and choose a legitimate company to do business with instead.

Your finances are a very private matter, and it's up to you to make sure you hire a debt negotiation company that will look after your interests. Read the following characteristics that legitimate settlement companies don't typically display. If the company you're contacting presents any of the following traits, I advise you to stay away from it.

Just because a debt negotiation company presents any of the characteristics mentioned below doesn't guarantee it's a scam. However, it's a pretty strong sign for you to consider contacting another company that doesn't present any of these traits and, as a result, has less chances of being a fraud.

6 Hints To Help You Prevent A Debt Settlement Scam

1) New In The Field

If a company is new to the field of debt negotiation, it's probably not experienced enough to count with strong connections in the credit history or to get you the best deal. In the worst case, the company may even be a fraud waiting to run away with your money. Hire a company that's been around for a while. There are more chances it'll be legitimate and have effective relationships with creditors to get you the best possible deal.

2) Automatic Enrollment

So as to make use of any legitimate financial alternative to become debt free, first you need to qualify. Each alternative is different and can only be used to eliminate a specific type of debt and for a specific amount of money. Many variables determine if, for example, debt settlement is the right option for you. For instance, debt settlement companies can only settle unsecured debt. Thus, if you're looking forward to settling your student loans, the company won't be able to help you. That's why you need to be approved to enroll in a debt settlement program. As a result, if you contact a debt settlement company who instantly enrolls you in their program without first examining your case, there's a high probability that it's a scam.

3) Not Accredited With TASC And USOBA

TASC (The Association of Debt Settlement Companies) and USOBA (United States Organization for Bankruptcy Alternatives) promote fair regulation in the field of debt negotiation and protect consumers. A debt negotiation company may not be a member of TASC or USOBA and still be legitimate, but you won't be guaranteed that the company's practices are fair and reliable. So if you have to pick between a debt settlement company that's a member of TASC and USOBA and a company that isn't, I advise you to pick the one that is. Why take any chances?

4) Long Programs

If a debt settlement company offers to enroll you in a program that lasts around four years or more, I advise you not to take the offer. Four years is too long for a settlement program and creditors may decide to sue you. Once again, although this trait isn't a guarantee that the company is a fraud, there are more chances the settlement won't work for you and you'll end up losing money instead of negotiating your debt.

5) False Information

If a debt negotiation company explains that they'll personally fix your credit score and guarantee you creditors won't sue you while you're in the program, don't trust your business to them. Why? Simple: they're lying. No matter how much a debt settlement company wants to help you get out of debt, they can't fix your credit score. Your credit score will, in the short run, be hurt. Also, although it doesn't usually happen, creditors always have the right to take you to court. That's why reliable debt settlement companies keep their programs short: so you'll get out of debt quicker and there'll be less chances of your creditors suing you.

6) All Advantages, No Drawbacks

The minute a debt negotiation company says their program can only offer you pros, hang up. Once again, they're lying. Just like any other alternative to put your finances back on track, debt settlement has its advantages and disadvantages. When a deal sounds too good to be true, it probably is. Contact a company that's honest and tells you all the truth: the good part and the bad part of settling your debt. It's up to you to decide if the advantages are worth the disadvantages that come with it. But it's not up to the company to hide the truth from you, taking away from you the power to decide what's the best alternative for your financial future.

Shop Around

Take the time to browse the internet and compare different debt negotiation companies. Which ones are member of TASC and USOBA? Which ones offer shorter programs? Give them a call. Are they willing to automatically enroll you in their program without analyzing your case? Do they inform you that your credit score will be hurt in the short term? Do they make it clear that, even though creditors rarely sue once you enroll in their debt settlement program, they still can choose to do it?

Make a comparison chart and write down the answer to these and more questions you can think of. Then, take a moment to analyze your research. Debt free solutions, such as debt negotiation, can help you get back on track... As long as you trust your business to a legitimate company.

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