Using caution when resolving debt

On Behalf of | Sep 22, 2015 | Debt Relief |

As many Texas residents may know, debt settlement might sound promising. However, unscrupulous companies may be taking advantage of a debtor’s frustration and promising results they cannot provide. A major debt settlement company is facing an asset freeze along with an injunction halting the company’s operation related to debt settlement representations.

The company charged fees upfront, something that is illegal. Promising to provide legal representation if it was needed, the debt settlement company collected legal fees without providing legal assistance. In light of this and the company’s failure to reduce debtors’ credit obligations, the Consumer Financial Protection Bureau took action.

A person who is looking for help in resolving debt may turn to an alternate debt settlement company. There are ways to access the company to see if it is reputable by being alert for warning signs. Unrealistic promises should be a red flag when looking at an advertisement or speaking to a company representative. Another indication that the company may be questionable is asking for fees before work is done. This is not realistic and outside the legal boundaries such companies are allowed. Speaking to a representative on the phone may provide insight. Since many are salespeople, legitimate questions might be left unanswered or glossed over. Being cautious when such signs are present might save problems later.

There are debt management companies that help clients work through their obligations. However, enrolling in such a program may make it difficult to make a fresh financial start. Talking to an attorney who is experienced in various forms of debt relief may help. In some cases, moving on after being overwhelmed by debt may involve exploring bankruptcy.