Debt Settlement Debt Reduction Eliminate Debt

When searching for a way to get out of debt, it is easy to be romanced by companies that make amazing promises that seem too good to be true:

It won’t damage your credit score!
We’ll settle your debt for 25-40 cents on the dollar!
We can save you over 60%-70% of your debt!

A desperate person trying to find relief from suffocating debt could easily latch on to these promises, and unfortunately many do. Then, instead of easing their debt and eventually rebuilding their credit, they are left with lawsuits and bankruptcy. Here are some tips to help you avoid debt settlement scams:

1. For starters, make sure the company is reputable. Is it a member of the Better Business Bureau (BBB), or the chamber of commerce? If you’re working with a law firm, check out its standing with the bar association. Also, check how long the company has been in business. If it’s only been one or two years, you might want to find someone else to help you. Finally, look for letters from real people who were satisfied with their experience.

2. If the company says it can eliminate your debt without damaging your credit score, they are absolutely lying. Unfortunately, there is no way to avoid hurting your credit while working out a debt settlement. However, if you are working with a reputable company, they will have you out of debt relatively quickly, and on your way to rebuilding a good credit rating.

3. Watch out for companies that claim to be able to reduce your debt by 60% - 70%, or to settle your debt for 25 to 40 cents on the dollar. These settlements sound too good to be true, and they usually are. A more realistic settlement, including fees, is around 40%, or around 60 – 75 cents on the dollar.

4. Finally, remember the old adage, “if it seems too good to be true, it probably is.” The best way to protect yourself from scams is to do some research and become an informed consumer.