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Signs of a potential debt relief scam

On Behalf of | Jan 14, 2024 | Credit Repair

If you are struggling to keep up with your bills, you may be tempted to sign a contract with an Illinois debt relief agency. While there are a number of legitimate organizations to choose from, there are also a number of groups looking to waste your time and money. Fortunately, you can reduce your risk of being a victim by knowing the signs of a potential scam.

You’re advised to stop paying bills

One of the key signs of a shady organization is an order to stop paying your bills during the debt relief process. Typically, all you’ll get by not paying your bills is a reduced credit score and creditors potentially threatening to sue you for the unpaid balance. You will also likely be subject to collection calls or other harassment until you either get current on your balance or pay it off in full.

An organization contacts you

A company that contacts you out of the blue is typically only interested in seeing how much money it can get as opposed to how it can help you. Furthermore, a company may have to contact you because it can’t be found online or through other means because it has been banned from providing debt relief services.

There is a large upfront fee

There is nothing illegal about a debt relief company charging for its services. However, a reputable one will typically only levy a fee based on how much it can help you save. For instance, if a debt relief agency was able to get $10,000 of your debt forgiven, it might take $1,000 as a fee. Therefore, if you are asked to pay before any debt relief or credit repair services are rendered, it should be a clear warning sign to walk away.

There are many possible debt relief options including bankruptcy, a credit card balance transfer or a debt management plan. Ideally, you will talk to many different service providers before agreeing to any type of debt forgiveness or repayment plan.