Debt Consolidation Scams
Many debtors do everything they can to avoid filing Bankruptcy, an effort that often sends them through debt consolidation before they end up in bankruptcy court. As we have warned before, be very wary of debt consolidation or debt settlement companies who are not legitimate and/or make claims that they can make debt “disappear.” This is simply untrue. Debt consolidation simply puts all of your debts together so that you make one payment as opposed to several payments. Unfortunately, many debtors end up paying a very high premium for this type of service.
If you insistent upon using a debt consolidation company there are some red flags you need to be aware of before you hand over your hard earned money:
RED FLAG: The debt consolidation company charges high up-front fees or monthly fees.
RED FLAG: The debt consolidation company wants to sign you up for their service; but they have not reviewed your financial situation.
RED FLAG: The debt consolidation company wants you to begin making payments into their plan before your creditors have agreed to take part in the plan.
Make sure that any debt consolidation company you work with is approved by the National Foundation For Credit Counseling