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Debt relief: Be cautious when choosing debt settlement services

When New Jersey consumers are overcome by debt due to job losses, medical emergencies or other reasons, they may be considering the available options to remedy the situations. One of the frequently advertised options for debt relief is debt settlement but, unfortunately, many of these operators conduct unsavory practices that could lead to even more debt. Weighing the pros and cons of debt settlement may be best done under the guidance of legal counsel.

It is not uncommon for debt settlement scam operators to initiate contact after aggressive pursuit of potential clients -- or rather victims. If the consumer does not initiate the contact, alarm bells should be sounding, and the company must be thoroughly researched before entering into any dealings with it. Another giveaway for scams is the demand for upfront fees to be paid. Although this has been prohibited by the Federal Trade Commission since 2010, some scammers search for loopholes to dodge the rules.

Debt settlement involves the company entering into negotiations with creditors on behalf of the clients. The success depends on the creditor's willingness to settle, not on the debt settlement company's expertise. For this reason, any guarantees provided by the debt settlement company must raise suspicion. This includes guarantees that lawsuits and debt collection calls will cease, as creditors are free to pursue legal action during this process.

New Jersey individuals may want to discuss their financial dilemmas with an experienced bankruptcy attorney. Although bankruptcy is often seen as the last resort for debt relief, this is typically the only solution that will stop creditor action. Upon filing for bankruptcy, an automatic stay is put into effect that prevents any further creditor harassment. A lawyer can assess the unique circumstances of a client before making recommendations to resolve his or her financial issues.

Source: thesimpledollar.com, "Avoiding Debt Settlement Scams", Saundra Latham, July 29, 2016

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  • NACBA | National Association of Consumer Bankruptcy Attorneys
  • NACA | National Association of Consumer Advocates
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Goldman & Beslow, LLC

Goldman & Beslow, LLC is a Federal Debt Relief Agency by an Act of Congress. We have proudly assisted consumers seeking relief under the U.S. Bankruptcy Code for over 38 years.

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