Watch Out for Debt Settlement Scams

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This is a guest article from Bob Underwood

Finance scandals have a pretty long history. The latest scandal to hit the stand is debt settlement scams.

The economic scenario in the post-recession U.S is quite scary. Consumer debt has reached $2.43 trillion, as per statistics from the Federal Reserve. A lot of people are struggling to pay off their unsecured debts. In such a scenario, shady debt settlement companies are surfacing to exploit the unsuspecting debt-stricken consumers.

How can unscrupulous debt settlement companies deceive you?

They will promise you that they will wipe out all your debts. The internet is inundated with advertisements from fraud debt settlement companies. Their offers might seem to be lucrative and mind blowing, but would actually put you in deeper financial trouble.

Most debt settlement companies charge an incredibly high fee for their services. The worst part is that they won’t even let you know that they will eventually charge you so much. In other words, a large part of their fees comes in the form of hidden charges. So be prepared for a series of nasty surprises if you approach a debt settlement company. If you can afford their fees, then you would not have been in debt in the first place.Secondly, these companies will hardly offer you any services in return for your money. This is not just a wild guess. If you check the Better Business Bureau rating of these companies, you will be taken aback by the number of complaints. Most debtors complain that these companies are unresponsive when they are needed to act. At best, they will save you a scanty amount, which will surely not justify the money they charge.Finally, debt settlement will leave you ruined in terms of credit score. This debt relief program is just next to bankruptcy when it comes to hurting credit rating. When you will approach the lenders for a loan in the post-settlement period, they would check your credit and find out that you have been in a settlement program and not paid back your debt completely. So securing credit will be extremely difficult. Therefore, it is no surprise that the settlement companies usually try to keep their clients in dark regarding this issue.Debt settlement can work for some people provided they are with the right companies. But it is virtually impossible to separate the good from the bad ones in the over-crowded debt relief industry. So proceed with caution.

This article is a guest post from Bob Underwood. Bob is the editor of Amazing Shit, a blog on entertainment news, reviews, and downloads.

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