Tips for Avoiding Debt Reduction Scams

I have read a lot about the federal debt reduction initiative and I must admit none of it has been good. From everything I am seeing, they are trying to separate you from your money. This tends to be more of a problem when people are looking for help. It seems like there is a scammer ready to tell you what you want to hear and take your money and run.

There is no such thing as a federal debt reduction initiative. You can use a nonprofit credit counseling company or a debt settlement company, but there is no direct government agency that is going to help you get out of debt. But if an organization is trying to appear trust worthy, it always sounds good if they sound like they are affiliated with the federal government.

If you have debt, you are going to have to decide how you want to manage it. But if you are going to seek help, make sure you know who you are doing business with. Find out what the BBB has to say and also see what the forums are saying. Just because someone has a complaint against them does not mean that they are dishonest. These orgainzations are in an unpleasant business and they are not liked by all their clients. This may be reason for some to file a complaint. Any company that is reputable will make the effort to find a solution that is acceptable to both parties.

A good alterntive is a nonprofit service company. Rarely would a scammer go the nonprofit route. Keep in mind that just because they are nonprofit, that does not necessarily mean they are free. They do need money to cover their expenses. A setup fee of $50 is charged as well as a monthly fee of $30-$50 when you enroll with a credit counseling agency. If they want to hold back your first payment, look for another service organization. If you offer the federal debt reduction initiative, check it out carefully.

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