Better Business Bureau (BBB) is warning financially distressed families to be aware of the debt settlement companies. Since the recession, BBB has received more than 3500 complaints from individuals who have sought debt relief from debt settlement companies. The debt settlement companies claim that they can easily reduce your debt and eliminate all debt issues from your life but actually they dig you deeper into the debt hole. There are many individuals who have been charged huge upfront fees for settling their debts but with a negative result. All of them landed themselves more into debt after signing up with such debt settlement companies. The debt settlement industry is flourishing and somehow financially distressed consumers are lured into believing that they can eliminate their credit card debts. The settlement companies make false promises of helping the consumers vanish their debt amount within a few months. But the actual truth is that this process doesn't work for many consumers. It has some serious negative consequences on your financial life and on your credit score. This is the reason why BBB alerts the consumers to consider the option of debt settlement as a part of debt relief only when they have no other option left but to file bankruptcy. Have a look at the things to be considered before committing yourself to any settlement company. 1. Huge upfront fees: Most scam debt settlement companies charge huge upfront fees before assessing your financial condition. Before approaching a settlement company, check their upfront fees. If you feel that it is abnormally high, then know that it is a scam company. 2. Big promises: If you think that the promises made by the settlement companies are too good to be true, then wait and check. Often debt settlement companies make big promises which they fail to deliver with time. Such fake promises should be taken care of. 3. Quick fix of debts: Incurring debts is very easy but fixing them takes time. So, if you see a company promising you to eliminate your debts overnight, then beware of such a company. 4. Your credit rating will drop: The settlement companies may ask you to stop receiving creditor calls. But on the other hand your creditors may threaten legal action which may affect your credit score significantly. Thus, before you think of a debt relief option such as debt settlement, BBB advises you on contacting your lender first. Research debt settlement companies with the BBB and check the number of complaints and the consumer feedbacks to avoid falling into trouble. BM
