Why You Should Beware Debt Consolidation Scams

Creditor lawsuits can be very stressfulDebt consolidation scams may appear to be your savior at first glance, but they often make everything much worse. They are expensive and highly predatory. If you are struggling with debt, whether it’s credit cards, medical expenses, or anything else, debt consolidation is rarely a better option than Chapter 7 bankruptcy.

The Dangers of Debt Consolidation Scams

There are a variety of ways that these debt consolidation scams will drain what little cash you have and do significant damage to your credit score. Here are some of the ways that debt consolidation can hurt you:

  • High Monthly Payments – Debt consolidation companies commonly require higher monthly payments than any of your creditors would. While a creditor may agree to a debt settlement of half or even less of the principle owed, debt consolidation companies are not typically as generous.
  • Monthly Service Fees – Most debt consolidation scams require a monthly fee, but do very little to earn it. These fees may not seem like a lot, but every dollar adds up, especially when you’re not getting anything for that dollar.
  • Direct Withdrawal – Debt consolidation companies require access to your bank accounts, which is something you should be extremely cautious about. They take money when they want, often leaving victims with nothing to pay rent or buy food.
  • Debt Doesn’t Get Paid – Debt consolidation scams promise to pay off your debts so that you consolidate your debt with one company, them. However, it’s not uncommon for these scammers to not pay the creditors until you have made payments to them for a long period. This means your debts are slowly going into default and you will continue to be harassed and sued.
  • Creditor Harassment – Debt consolidation companies can do nothing about the continued creditor harassment. You will still get phone calls every day.
  • Creditor Lawsuits – Creditors can also still sue you. Even after you have entered a debt consolidation scam, creditors will come at you with everything they have to get their money.

Be wary of debt consolidation scams. While they may appear to be interested in helping you, they are usually predators searching for easy money. Chapter 7 bankruptcy is typically a much better solution for debt problems. Most, if not all, of your debt could be discharged in Chapter 7 bankruptcy. That means no more creditor lawsuits or harassment, and no more payments.

The Monmouth County bankruptcy attorneys at Garland & Mason, L.L.C. can help you to achieve your financial goal of becoming debt free. Call or fill out an online form today to find out how we can help you.



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