Watch Out for Fraudulent Debt Settlement Services
Many borrowers in a bad debt situation are advised to negotiate with their creditors. This is a sound advice and when done correctly, it gives the borrower the chance to reduce the interest rate of their debts as well as lower their monthly payments. In extreme debt situations, a credit may even agree to a settlement which can lower your original debt by as much as 60%. Nevertheless, some consumers may feel the need to a hire professional help. If you feel uncomfortable with the thought of debt negotiation or debt settlement, you might want to hire someone else to do it for you. The fact is that you can find quite a number debt consolidation companies in the market but only a few are legitimate and can be trusted. In reality, there are many companies offering debt settlement services that have a questionable reputation. For instance, a debt settlement agency is supposed to negotiate with creditors on behalf of a borrower. A borrower might be informed that a settlement has been agreed upon and all there is to do is to sign up a loan so that the money can be used to pay the creditors. In turn, the borrower is subjected to the terms and policies of the debt settlement company. Here is where the problem comes in. The borrower may think that his/her debt problem has been solved and that the debt settlement agency has been able to
reduce the amount of debt and make way for easier repayment. In reality, the borrower may be faced with more fees and high interest rates spread out into a longer period of repayment. So what’s the catch? Representatives of these debt-settlement companies earn commissions based upon the number of people they recruit into signing up for the service. You can expect a representative of a debt settlement company to convince you that signing up is the best possible solution to your problem. Needlessto say, the representative will not advise you to try to negotiate on your own or suggest other viable solutions. The most important thing is for you to sign for debt settlement service whether you need it or not. After all, you’re the only one who will pay the fees. Fraudulent debt settlement agencies are after making money at the expense of borrowers in debt. Once you sign up for a debt settlement service, you will pay the fees and how much it will cost you will depend on the agency. This is why it is extremely important to do your own investigation before dealing with any agency or company offering debt settlement or even debt consolidation for that matter. Before signing up for debt solutions, you should know the exact fees that you will incur from the beginning until the end of the repayment period. It is also a good idea to check with your creditors first to see whether a settlement has really been made with your debts. Make sure that the loan has been used to pay all your charges. Check from the BBB(Better BusinessBureau) if there have been records of complaints against a particular company and see how the issues have been resolved.