Many clients who come to see us have either signed up or are thinking about signing up for a debt relief or debt management company. Unfortunately, many of these people have fallen into scams by these companies who mislead them and falsely promise to help. People believe that filing bankruptcy should be their “last option.” However, many debt management companies will sign people up for their plans knowing, that these people won’t be able to pay off their debts. Many of our clients are conscious about “doing the right thing” and paying back their debts but are mislead and end up in the same position they were in after dishing out thousands of dollars in high fees. 
Meeting with a bankruptcy lawyer should be the first step when you are facing financial troubles. Many bankruptcy lawyers offer free consultations that you should take advantage of. Even if you don’t plan to file for bankruptcy, sitting with a bankruptcy lawyer can at the very minimum, give you a full picture of your financial situation. There is a lot of false information about filing for bankruptcy out there. Before falling into a debt management program, educate yourself about the benefits the bankruptcy code offers.
Some Things You Should Look Into Before Signing Up for A Debt Management Company:
Before Signing Up for the Debt Management or Debt Relief Company:
- Research the company throughly
- Look to see if the debt relief company is listed in the better business bureau
- Look at different reviews for the company
*Always make sure to read the fine print before signing any contract. There can be many hidden fees that actually will cause you to end up paying more then what you owe now.
Some Clauses Within the Debt Management Contract you Should Take a Closer Look at Are:
- Sign-up fees
- High Monthly Fees
- Voluntary Fees
Make Sure that the Debt Managment Company Is Really Looking into your Unique Financial hardship By:
- Reviewing your financial history
- Contacting your creditors to ensure they will work with them
- Making sure that this plan will really help you
If You Have Signed up For the Company Then You Should:
- Make sure the money is being used to settle your debts
- Ask for proof of each debt that was settled so that you know where your money is going
- Ask that any notices from the card companies be sent to you so that you can see what is going on.
Most importantly, if any of these companies are pressuring you into signing up for their debt relief plans or harassing you, don’t feel like you are obligated to sign up. It is your decision, you should not feel pressured to do anything. If any of these companies start telling you that bankruptcy is not a good option for you, and that your credit will be ruined forever, don’t automatically assume what they say true. Stating that your credit will be ruined forever is simply, false. Remember, most of these people who work for these companies are not bankruptcy lawyers. Never take any legal advice from someone who is NOT a lawyer.