Some tips to stay away from scam debt settlement companies

A considerable number of Americans are in urgent need of help with their debt problems. They have fallen into debt for a number of reasons and the most prominent is that they're not frugal with their spending habits. Irrational usage of credit cards has made the situation even worse. The reality that many people are desperately seeking assistance to settle their debts makes them exposed to con artists. Though there are genuine credit card debt settlement companies, it is important that you understand the difference between the ones that provide true assistance and the ones that are there to grab your money. Given below are some tips that you should apply while looking for a legitimate debt settlement company to pay off your debts:

Do it yourself debt settlement

Though it appears too simple, but the surest means to stay away from a scam debt settlement company is to see whether the company offers advices on how you can do it yourself. If the company doesn't do it, then it most probably is a scam company.

Debt settlement and consolidation are not similar

A debt settlement company works with your creditors to lower your overall debt amount. Debt settlement can be costly since you sign up for their services and pay a monthly charge. In contrast, debt consolidation combines all your debts into one debt under a new creditor with a reduced interest rate and monthly payment.

If it sounds too simple, it is a scam

Some settlement companies maintain that they would sign you up without any upfront fees and would simply register you to pay monthly fees to them. When this takes place, you have no signed paperwork or formal contract between you and the settlement company. There is no assurance that they would perform what they claimed to you; you just accepted to pay them money. Stay away from this kind of situation – if the company advertises “no hassle”, it’s possibly a scam.

Perform your research

Since youi're searching for companies to assist you, explore each company prior to making a commitment to them or even before talking to them. The Federal Trade Commission (FTC) and the Attorney General’s office in your state are valuable resources. You can look for online company reviews. The Better Business Bureau (BBB) would have history of any complaints lodged against a company.

Don't give too many details

A genuine debt settlement company wouldn't request personal details. They would rather ask you to provide details like the amount due, the names of your creditors and the interest rate. If the settlement company is requesting details like your account numbers or your social security number, you should be alert and terminate the conversation.

Look cautiously – there might be hidden fees

Just go through the fine print and ensure there are no hidden fees. A debt settlement company might ask for some type of service fee in the midst of the transactions after you’ve registered with them. Just make sure that you don't sign any contract or document till you’ve checked them thoroughly.

Get recommendations from dependable companies or individuals

You should look for suggestions and referrals from people who settled their debts. Your colleagues, acquaintances or family members might have a satisfactory or disappointing experience with a debt settlement company. You should ask questions to people whom you rely on.

If you follow these tips, you should be able to select a good debt settlement company and steer clear of scam companies. One more thing that you should keep in mind is that you should rely on your gut feeling. If a company appears suspicious or making promises that appear too good to be true, then it’s most likely a scam.