The Dangers of Debt-Relief Scams

Posted on November 4, 2015 at 12:00pm by
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Debt-relief scams have hurt tens of thousands of Americans under false promises of reducing debts and eliminating collection accounts. After doing business with these companies, borrowers end up in more debt. Depending on the type of debt, borrowers can end up losing their most precious possessions.

Take the case of a Brooklyn woman who was behind on her $30,000 home equity loan and desperate for a solution. She turned to Homeowners Assistance Services, which wrote her a check for $50,000. As it turns out, she had signed over the deed to her home, and now Homeowners Assistance Services was threatening an eviction.

We have written previous blogs on student loan debt-relief scams and how these fraudsters charge former students and graduates hundreds of dollars for information that can be obtained at no cost. Former students and graduates who get caught up in debt-relief scams use money that could have paid down student loan balances, in some cases, leading to default. Like other debt-relief scams, these ‘companies’ require upfront fees for services.

Many debt-relief scams have come under the radar of the Federal Trade Commission and state Attorney General offices. However, there are still scams taking advantage of desperate people who might be unaware of much safer options for relieving the pressure of excessive debts.

How Can I Avoid Debt-Relief Scams?

Borrowers can spot debt-relief scams fairly easily with a simple Google search, as chances are high that other people have been defrauded. In addition, legitimate debt-relief organizations will not charge upfront fees for services.

If borrowers are really struggling with debt and desperate for a way out, it would help to contact a bankruptcy attorney. Chapter 13 bankruptcy can help reorganize burdensome debts, making finances more manageable.

The Sader Law FirmKansas City Bankruptcy Attorneys