What is Debt Settlement and is it a Scam?

Debt settlement is a process where a debtor negotiates with their creditors to reduce the amount of debt owed. While legitimate debt settlement companies exist, there are also scams that consumers should be aware of. Here are some key points to consider:

Debt Relief Service Scams:

• These scams target consumers with significant credit card debt by falsely promising to negotiate with creditors to settle or lower their debts.
• Some operations charge large up-front fees but fail to provide any service or achieve debt reduction.
• Beware of automated “robocalls” promoting debt relief services.
• The Federal Trade Commission (FTC) has taken action against such scams and amended rules to protect consumers seeking debt relief services.

Signs of Debt Settlement Scams:

• Unsolicited Robocalls: Be cautious if you receive unsolicited calls promising debt relief.
• Upfront Payment Requests: Scammers often ask for upfront fees before delivering results.
• Guarantees of Results: No legitimate company can guarantee specific outcomes.
• Lack of Clear Explanation: Scammers may avoid explaining the potential impact on your credit.

How to Avoid Becoming a Victim:

• Research: Investigate any debt settlement company thoroughly before working with them.
• Be Skeptical: If an offer sounds too good to be true, it probably is.
• Consult Professionals: Seek advice from financial counselors or attorneys.
• Know Your Rights: Understand your rights under consumer protection laws.

Remember to exercise caution and verify the legitimacy of any debt settlement service. If you suspect a scam, report it to the appropriate authorities. In North Carolina, we, the Law Offices of John T. Orcutt, would love to be the bankruptcy attorney you call. If you find yourself struggling financially, being hounded by debt collectors and looking for a permanent debt-relief solution, contact the law offices of John T. Orcutt for a free consultation on getting out of debt for good.