Now that debt settlement is becoming a more popular option for getting out of debt, so are the scammers. And since most people don't really understand how debt settlement works, getting scammed is a lot easier.
DON'T just sign up with the first company you see on TV without doing your homework!
And don't let yourself get ripped off if you decide to use someone to settle your credit card bills. Think of it as you "hiring" them to perform a service for you. And when you hire someone, you're careful, aren't you? Well, if not, you should be.
Most of the debt settlement horror stories occur because people have no idea what they are getting into. Shame on them!
Know what you are getting into. Learn how debt settlement works. And look for these top 5 warning signs that you should avoid a debt settlement company:
- Sounds too good to be true - yes debt settlement works. But it takes time. And different creditors look at settlement differently. So if any company promises results that sound too good to be true, watch out!
- Vague answers your questions - like the old TV commercial, an educated consumer is the best customer. If the settlement company simply want to sign you up and won't answer your questions clearly, then move on to the next one.
- Want you to send money before you sign (or read) paperwork - you MUST read AND sign paperwork before sending any money. This is your contract. If something goes wrong, and you don't have any paperwork, you're in trouble.
- Too many BBB complaints - OK, the Better Business Bureau doesn't like the business of debt settlement, and some companies get D or F grades simply because they are in the industry, even with just a few complaints. But if the company starts getting up to 10, 20, 50 compaints, it's a good idea to turn and run.
- No screening process to see if you are actually a good candidate - no, not everyone can benefit from settling credit card debts. If you are close to bankruptcy, if you have the means to pay on time, if you don't have enough cash to make the settlement payments, then you may need to seek legal advice instead!
If you come across any of these warning signs, STOP!
And look for another company to settle your debts. There are lots of good ones out there. Here are our reviews of the top debt settlement companies we've found (and yes, we get credit for referring you).
If you find out that credit card debt settlement is NOT right for you, here are some other ways to get the debt help you need.