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How can you avoid credit counseling scams?

On Behalf of | Oct 24, 2018 | Credit Card Debt

Many Tennessee debtors may seek relief from crushing debt with credit counseling services. Credit counseling from a reputable organization is an alternative to bankruptcy that can help you manage your debt and get back on your feet. 

Unfortunately, according to FindLaw, the number of unscrupulous operators attempting to take advantage of unsuspecting and desperate Americans on the verge of bankruptcy has increased as household debt has also reached record highs. Before you accept any agreement from a credit counseling organization, do some investigation on your own first to ensure that the services offered are legitimate.

While a reputable credit counselor may charge a small monthly fee for debt repayment service, they offer free initial consultations and never charge you big fees up front. Steer clear of high monthly service charges or other fees that defeat your efforts to pay bills by adding to your debt load.

Before entering into an agreement, make sure the agency is reputable by inquiring about it with the Better Business Bureau or a state consumer agency. Also be wary of credit counseling companies that are for-profit; while some are reputable, you are better off with a non-profit organization as a general rule. 

Even after you find a reputable credit counselor, be sure that you check in with your creditors to ensure that agency is distributing your monthly payments according to your agreement. Be proactive in confirming that your credit counseling service is holding up its end of the bargain. 

Finally, regard any claims to help you get out of debt easily as a red flag. As the saying goes, if it sounds too good to be true, it probably is. 

The information in this article is not intended as legal advice but provided for educational purposes only.


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