Debt is more common than ever before, as the economy and job market hasn’t been kind to people. We’re all paying for our mistakes right now. Too many have succumbed to the temptations of easy debt relief. Unscrupulous individuals trying to lure desperate people into highly questionable debt relief schemes that involve agreeing to a new loan that helps deal with their debt issues.
Here are some examples of debt relief schemes to avoid:
Predatory Loan Schemes
Watch out for people from debt relief companies that aren’t affiliated with lending institutions, as they will use false, misleading sales tactics to coerce you into a high-cost loan, especially if you’re need of fast cash immediately. Past victims have been forced to refinance their homes as collateral, and often lose them in a foreclosure after they defaulted on the loan.
Credit Card Repair Schemes
Often, credit card repair schemers promise to erase a victim’s bad credit history with a quick and easy loan. Under the terms of the agreement, you will pay massive fees that will be spread over the entire length of the loan. This method will do very little on lowering your debt. The only steady and consistent method to repair your bad credit history is making your payments consistently on-time.
Mortgage Foreclosure Fraud Schemes
This scheme involves contacting homeowners who are at risk of losing their homes to foreclosure. They propose a solution to help pay the mortgage by temporarily having the homeowner “rent” their home from them. To complete the business transaction, the homeowner will have to “temporarily” transfer ownership of the home, while a phony housing counselor will help negotiate a new home loan that does very little in return.
Credit Card Fraud Schemes
Identity thieves can steal your personal information and apply for credit cards under your name. Identity thief can be costly to fix, and take several months to repair the damage. Notify your card issuer if you have a lost or stolen credit card as soon as possible to help limit your losses.
How can you avoid debt relief schemes?
If you’re looking for help, an Orlando Florida bankruptcy attorney is an excellent starting point. You should spend some time shopping around before choosing a company to assist you with debt relief. There are answers to debt problems, but these solutions cannot be provided overnight.
Try working with financial institutions that have been independently verified as being legitimate companies. They have developed a good working relationship with creditors that often can help reduce your debt faster.
You can prevent credit card schemes by safeguarding your personal and financial information. Also, monitor your credit card statements and yearly credit reports for any signs that someone has stolen your identity.