Debt Relief Scams Can Force Individuals Into Greater Financial Difficulties

You may not know who to trust when you are experiencing financial problems. Friends may have given you advice on how they handled their money troubles, but their solutions only made matters worse for you. You might cut down spending or increase your hours at work, but these approaches usually only offer temporary relief.

We have all heard or seen advertisements by organizations making promises to help you with your money situation. They may seem like they have the answers that you have been searching all over to find. When you speak with them, they are able to answer all of your questions, and have you feeling confident about your ability to emerge from their process debt-free.

However, when you start working with these companies, you suddenly find out that things do not work out as promised. You are still having massive debt problems, and, to make matters worse, collection agencies are now calling much more frequently. When you call the debt relief company, they ask for more money to address these issues.

Unfortunately, this happens all too frequently with some of these agencies. They advise debtors to stop making payments, instead turning it all over to the agency to make payments on their behalf. Often, this money is instead used to pay the company's fees, and none of the debts are paid.

Debtors might have more success considering a different option to address their debt concerns. This may include working together with creditors to create a more manageable payment plan, if this is something that the creditors will agree to do.

Some may wish to file for bankruptcy, which could be the most effective solution to these issues. Once an individual files for bankruptcy, they are afforded protections offered by the automatic stay provisions in the bankruptcy code. This means that any debt-recovery actions against these individuals must cease while the bankruptcy is ongoing. Bankruptcy also may allow individuals to keep some of the assets that they own, instead of being forced to sell them to make payments on old debts.

Before you sign up with a debt relief company, make sure you do your homework. Check out the company's background to see if they have had any complaints made against them. If you have any uncertainties about the claims they are making, walk away. The problems caused by some of these debt relief agencies will only make things much worse for you financially.

While bankruptcy might be the absolute last thing you want to do, you need to be fully aware of all of your options. Discussing your specific financial situation with an experienced bankruptcy attorney can help you be sure that you are making the right decisions.