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Debt Management Scams - How To Avoid Them

Author : Callum Leslie Walters

Sometimes debt spirals out of control. People suffer from unexpected illnesses, economies take downturns, and companies downsize. For any of these reasons, or a variety of others, people can find themselves lying awake at night wondering how they can manage their credit card bills, mortgages, and car payments. Because bankruptcy is often the desperate, final choice of someone facing financial distress, a debt management plan is often the first option attempted. Unfortunately, some individuals look to profit by unscrupulous means based on someone else's fiduciary troubles, and it is important to avoid debt management scams.

Extremely high enrollment and consultation fees create a red flag that should have you questioning the legitimacy of a debt management company. The service fees of reliable companies should fall within the $50 to $100 range. If the fees with which you are presented enter the $150 and above territory, it is time to keep shopping. Monthly fees and petitions for voluntary contributions should also have you hitting the highway.

Have you ever heard of the emails sent to people from their long lost Russian uncle who recently died and had a two-million dollar inheritance to pass onto them? All the uncle's executor needs is the inheritor's bank account and social security numbers and it is his. You would know better than to provide this information, and you need to protect this information when dealing with a debt management company as well. If a management provider refuses to provide you with free information about their plan without credit card account and banking numbers, then walk away.

Some debt management plan providers are quite eager to help you get out from under debt. So eager in fact, that they already have the perfect plan selected for you even before they hear about your specific financial situation. Just as you would not want a doctor to write you a prescription for medicine before they even know what is wrong, you do not want to give money that you have a limited supply of to a debt management scam that will enroll you in an expensive plan and run off with it. Additionally, you have probably heard that you should get everything in writing. If a debt management company asks you to work on a verbal agreement, get away.

Overwhelming debt is certainly an unenviable position to be in, but there are many respectable debt management services to turn to. It is the few individuals that operate without morals that you want to stay away from. Knowing how to avoid debt management scams will keep you one step ahead of them.

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Tags:   finance, debt management, debt

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Submitted : 2011-06-21    Word Count : 870    Times Viewed: 415