As consumer debt continues to grow, many companies have appeared offering to save desperate individuals from the problems associated with high levels of debt. While some of these companies offer legitimate help and counseling in how to avoid accumulating debt in the future, some others simply want nothing more than to walk away with the little bit of money you have left, leaving you in an even worse position than before. These bad players typically use one of several common debt elimination scams to hook desperate borrowers and drain their bank accounts. Here are some signs to look for that signal a possible debt elimination scam.
Uncollectable Debt Claims
One of the favorite debt elimination scams used by unscrupulous companies today is the “uncollectable debt” scam. Companies using this scam tell desperate individuals that they do not have to worry about paying a particular debt because something in the terms and conditions of the debt agreement is flawed, rendering the debt illegal and uncollectable. The company then offers to negotiate with the creditor to get the information removed from the person’s credit report – for a fee of course. The person pays the fee, then waits and waits, hoping for good news from the company. This story typically ends with the person being sued for the debt in court by the creditor and judges rarely look favorably on the “This debt is illegal!” defense.
New Credit Profile Offers
Another popular debt elimination scam is the offer to create a new credit profile for the borrower. With this scam, the person pays the company to create a new credit profile for them, essentially wiping their credit slate clean and allowing the person to start over without the hassles of their previous debt. While it may seem like a great idea on the surface, it is technically illegal and often involves the creation of fraudulent documents, including a fake social security number. If you are caught using this method, not only will you still owe all of your previous debts, but you will also be facing criminal charges for fraudulent activities. The last thing you want is to go to jail because you trusted the wrong company.
Companies That Actually Can Help
If you are looking for a debt elimination solution, there are some companies that actually can help you. Debt consolidation companies can help you swap multiple high interest debts for a single debt with a lower interest rate paid to the company. There are also credit counseling services that can help you learn how to use credit wisely and create a budget that will allow you to pay down your debts quicker. Make sure you review a company carefully before entrusting them with your personal information. A good reputation online and reviews from satisfied customers are good indications that you are choosing a legitimate company for helping you eliminate your debts.