Q: I keep getting telephone messages from a company that says I can get a 3 month break from paying my credit cards. They also say that I can settle my debts with my creditors and get out of debt sooner. It sounds great, but why would my creditors go along with this?
settlement companies. If something
seems too good to be true, it usually is.
3 Ways to Spot a Debt Settlement or Debt Relief Scam
- They require you to pay most of their fees up front before any of your money is used to settle your debts.
- They make unrealistic promises without any understanding of your financial situation. The truth is they have little if any influence with creditors.
- They tell you to stop talking with your creditors.
Pay Attention to the Details of Your Debt Settlement or Membership Agreement
As the saying goes, “there is no free lunch;” everything comes at a price. If you stop making payments on your credit cards, it will negatively impact your credit rating…for years. It could also cause your creditors to initiate collection or legal action against you. That’s a heavy price to pay for a 3 month break from making your payments.
How to Choose a Good Debt Relief Company
My advice here is the same I would give you when choosing any service; do your homework and check this company out thoroughly before signing anything. Also listen to your inner voice, it’s usually right and knows when to walk away. I suspect that after doing your homework your inner voice will be telling you to run not walk away.
Scott Hannah is the President and CEO of the Credit Counselling Society, one of Canada's leading non-profit credit counselling and credit education organizations. Scott writes a weekly column for Postmedia News which appears in print and/or digital editions of newspapers in Vancouver, Montreal, Edmonton, Calgary, Saskatoon, and Winnipeg.
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