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Debt Relief: Is Debt Relief Scam or Does it Really Work?

Press release May 18, 2012 Economy

Many companies claim to easily be able to eliminate your debt, however when searching for debt relief it is essential you choose a reputable agency.

In recent years debt has become an increasingly large problem in many developed countries, with credit being so readily available and a buy now, pay for later attitude. Many people are finding this debt difficult to repay, and interest begins to mount up, resulting in what may have started out as a relatively small amount of debt then growing.

Debt relief is a method which can help people out of financial difficulties through budgeting, contacting creditors, debt consolidation, or filing for bankruptcy. Many companies offer debt relief services, however when looking for a service it is important to proceed with caution as not all these work in the best interests of the person involved, and these companies are instead just seeking to make money for themselves. These debt relief scams generally falsely claim to be able to reduce debts, lower interest rates and stop the demands of creditors; however often the reality is that they can make the situation worse, and you could end up with the same amount of debts still, but with added fees and penalties, or the result could be bankruptcy - the worst thing for credit history and scores.

There are many legitimate debt relief options available, and many sources of information such as, where information and advice can be sought before contacting companies for help. If you believe that your financial hardship is temporary, you should begin by contacting creditors yourself and explain the situation to them. They are more than likely to temporarily suspend repayments if the account has been in good standing in the past. This however would come at a cost, and when you start making payments again, it is likely that they will be higher to compensate for the past due amount. A few months of debt relief such as this may just be enough to help you get back on your feet and worth the cost in the long run.

However, if you believe that you need help from a specialist company it is important to be cautions before agreeing for them to help you. Look out for companies who ask for account numbers before discussing their services. A reputable agency will happily give you information for free without asking for these. Watch out for statements such as; "Get you out of debt easily" and "lower your rates by 30-50 per cent" as these are rarely, if ever, true. Avoid counsellors who promise quick, easy solutions to your complex financial problems. Do not trust an agency who claims they can remove negative information from your credit report; as truthful and accurate information cannot be removed. A reputable company will allow you time to evaluate their offer, whereas a non-reputable one will insist you take immediate action.

Through taking the time to research your options and shopping around for the most suitable agency, debt relief can really work. However if you are taken in by a company’s outlandish claims, debt relief can so easily become a scam.