You find yourself in debt, but you do not believe it is severe enough to warrant a bankruptcy filing. What do you do? Most New Jersey residents have heard of debt settlement or repair firms. You know, the ones that tell you to stop paying your creditors, pay them instead and they will work with your creditors. Sounds decent enough, and they make it seem like it will take a lot of stress of your plate, but will it?
The truth is, it is possible to settle debts with creditors. Unfortunately, many of the settlement firms out there do not really accomplish much, and some of them are just scams to get your money.
How to spot a scam
There are actually quite a few red flags that people can watch out for so that they do not fall victim to debt relief scams. Some of these include:
- Require the payment of up-front fees
- Will not provide you with information about consumer rights
- Will tell you not to contact creditors
- Will promise to solve your financial woes
There are more, but you get the idea. If it sounds too good to be true, it probably is. If it is going to put you in a worse financial situation, it is not really worth it.
What can I do?
The truth of the matter is, there are legitimate debt settlement options out there. Many bankruptcy attorneys offer to assist with this. Legal counsel can review the finer details of your financial situation and then help you negotiate with creditors. Sometimes creditors are more willing to budge and settle debts if they believe that bankruptcy is on the table.
What if it doesn't work?
Sometimes, even with the help of a skilled negotiator, creditors stand firm and refuse to settle. If this happens, then bankruptcy may be the best option. Here again, your economic situation will need reviewing in order to determine if you even meet the qualifications to file and to determine which type of bankruptcy will best serve your needs.
Money is such a stressful part of life. When you are struggling monetarily, it can affect so many aspects of your life. Wanting financial relief is understandable. Just beware of the debt settlement or repair scammers who are ready to take your money and run without doing anything for you.