It can be easy for New Yorkers to face a financial crisis. For many people, a simple setback can result in very serious financial consequences. Many of the setbacks occur randomly and without warning. For example, a job loss or medical crisis can result in a cash crunch. In these cases, individuals may rely on credit cards to meet their monthly obligations. As people are unable to pay back the credit cards, interest will compile and the debt will snowball. When people have entered this cycle of debt, it can be very difficult to stop it.
However, there are debt relief options available for individuals struggling with credit card debt. These legitimate debt solutions, such as bankruptcy, can help individuals get the fresh financial start they desperately need. When individuals are facing financial challenges, they should understand their legal rights.
However, along with these legitimate sources of debt relief come a variety of debt relief scams. Many scammers try to take advantage of individuals’ fragile financial states in order to exploit them further. People should recognize the signs of debt settlement scams, in particular, when seeking debt relief for credit card debt.
According to The Federal Trade Commission, there are many signs that people should be aware of that could signal a debt settlement scam. First, individuals should be wary of companies that make guarantees or promises to reach debt settlements. In particular, individuals should be leery of guarantees that claim that 30 to 60 percent, for example, of a person’s debt will be forgiven.
Individuals should also stay away from companies that request payment before debts have been settled. Charging fees before settling debts is not allowed under FTC rules. Additionally, any guarantee to make unsecured debt go away should be a warning sign.
Other warning signs include promises of a new government program, asking people to cut off communications with creditors without explaining the consequences and claims that debt will be paid off for pennies on the dollar. These debt settlement scams can leave individuals in a worse situation than they were before. People who are facing serious credit card debt, therefore, should consider seeking legitimate help from an attorney.