Avoiding Fraudulent Debt Management Practices

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What Do I Believe?

Overwhelming debt can be an incredibly stressful issue and if you don't have the information readily available to deal with it you may not know where to start. Often times there are those who take advantage of that to market their model of "financial reform". In actual fact these parties are usually trying to sell you an unfair loan with significant collateral (things you own on the line if you don't pay) and in exchange they will "take care of your debt" or "repair your credit". If you aren't careful and fall prey to these scams, they can have incredibly negative effects on your finances so you should avoid them at all costs.

What Should I Not Believe?

Below is a list of red flags to look out for that are commonly associated with debt scams

  • Guaranteed reductions on debt payments that sound too good to be true. (A lender is not obliged to lower your minimum.)
  • Promises of debt elimination. (Debt does not magically disappear, the best way to reshape debt is through one of the previously mentioned methods.)
  • Assurance that unsecured creditors will not sue over non-payment (This is untrue, often times a fraudulent lender will set you up with unfair terms and then sue you for a settlement or your collateral later.)
  • Offers to remove negative records on your credit score. (Because of the sensitive nature of credit scores it is impossible to remove correct information from your credit score, whether positive or negative.)

What Resources Can I Access

Sometimes you might find yourself in a position where you want to make a purchase but need to verify the credibility of a business before doing so. A great place to start is the Better Business BureauLinks to an external site., sometimes called the "BBB" for short. The BBB is a directory where businesses can register after being verified as legitimate. There are other directories like the Better Business Bureau, but just because a company says it's verified doesn't mean it is. Make sure to verify the directory itself as well and any source you aren't familiar with.

What Now?

If you've read up to this point you know know the basics of debt management! Check out the next page to learn more about debt prevention and how you can get started fortifying your financial stability