Dear Readers, Picture This:
Your spouse is out of job, the monthly income is halved and your family is left without health insurance. Just as you are managing somehow by slashing all unnecessary expenses your child is hospitalized for a tonsillectomy. Past-due bills are piling up, the number of calls from nasty creditors, and the letters threatening to foreclose on your mortgage, are on the rise too. You contact non-profit debt counseling services who manage to keep their promise of permanently lowering interest rates on some of your outstanding bills. But six months on, and having paid the sign-up charge and monthly fee of the agency, your debt only increases. The counseling services seems to have profited more.
Claim for help is hollow, and the promise to rescue, a scam. The combination of high household debt levels and major corporate layoffs in the past few years has led to a sudden increase in many organizations that depend on people falling for these claims.
But What About The Law?
Yes, the laws are all in place to safeguard fair practices and what not, but the rise of abusive practices is phenomenal even in the face of such laws. Such credit counseling agencies are typically small and offer services such as providing help with budgeting and management of debt. Individual cases determine future course of action, with some extreme cases even steered into bankruptcy, but a majority guided towards debt management programs.
"More recently," says Winston, "a new kind of agency has arisen." Instead of being locally-based, these agencies are national. And, he adds, "they pitch their services aggressively," advertising on television, in magazines and over the Internet.
According to Winston, self-promotion was traditionally not a practice of credit counselors, but the problem with such advertising is that oftentimes it is not truthful. It has been seen that the word “non-profit” misleads people into blindly believing such organizations, and their intent.
As a note of warning, he advises people in a financial crisis to be particularly wary of organizations, and have a clear understanding of the fee structure that they follow.
You need to ask the right questions about commissions, and be wary of any possible no tie up between the credit card company you owe money to, and the agency – this will obviously influence the advice you are given. You should know that, commission kicked back to the credit agency could range anywhere from 5 to 15 percent of the amount that is paid. Reduction of you debt in such a scenario need not be the primary goal of the credit counselor. There have even been cases where people were wrongly advised to stay away from bankruptcy, when it was the best option.
For your information, a legitimate credit counseling agency would be aware and sympathetic towards your financial crisis and charge you just enough to cover their expenses. That would be essential differentiator between a "non-profit" organization, and a non-profit organization. The good news for debtors is that there are organizations where based on individual cases all charges are waived off.
Is There A Way To Know?
Profit making non-profit organizations can be identified based on a few tip offs. Here are some.
* They charge a high fee.
* They guarantee to eliminate unsecured debt or promise that it can be paid off for pennies on the dollar.
* They advise to stop making payments to your creditors.
* They provide no guidance on how to avoid financial trouble in the future.
* They automatically pitch their (fee-based) re-payment plan without considering your case at length.
* They promise to clean up your credit report. (It takes 10 years to eliminate bankruptcy filing, and late payment and defaults stay on your record for 7 years.)
If you find out that you are a victim, have your contract scrutinized by a trusted advisor. Once confirmed, you should file a report with the local Better Business Bureau or your State’s Attorney General’s office. You can contact the Federal Trade Commission, which may not be able to fight your case since it’s a law enforcement agency, but broader action can be initiated based on complaints. There can, for example, be a move to shut down a company if many such complaints trickle in.
Attempts are being made to crack down on these unscrupulous credit counseling firms, but in the meanwhile be alert to such possibilities. Go to a company if you know someone who’s been there and got their problem resolved, or of course if you are certain that the history they boast of is for real. But the bottom line is, be aware and prepared to tackle any negative consequences.
http://www.bankruptcyhome.com/howdidthishappen.htm
Friday, May 18, 2007
Credit Woes
Imagine this: Over the years your debts have somehow piled up to an unmanageable level. And now amongst unpaid bills and dealing with angry creditors, you feel the only solution for you is to get some help to clean up the mess. That is all well and good, but where exactly do you go to find this help?
Now imagine this: tired of the growing debts and with no way out you decide to consult a ‘professional’. You go to a credit counsellor and let that person try to help you out of your debts only to find that they have put you in more trouble than you already were in when you started.
Needless to say, over the years because of changes in lifestyles and spending habits, many individuals have found themselves in a situation where they are too deep in debt. Unfortunately, at the same time there has also been an increase in the number of abusive practitioners who pose as credit counsellors only to make the situation much worse than it was in the beginning.
The traditional credit counselling agencies were small and local services whose main function was to lend a hand to consumers with guidance and education about budgeting and how to manage their debts. Each case is studied individually and depending on the individual consumer’s situation they will be directed towards debt management, or at the worst case, filing for bankruptcy.
However there has been a shift in the nature of these small agencies. For a start, a lot of them are not small anymore. Nor are they local. The trend in credit counselling agencies finds organizations that operate at a national level and adopt aggressive marketing strategies to break through to the public. It is not unusual to see these credit counselling agencies selling their pitch by advertising through television, magazines, radio and the internet.
When going to a credit counselling agency keep in mind that most genuine agencies of this kind offer their services at a minimal fee. This fee that is charges is usually just enough to cover their expenses, thus they make the grade at a ‘non profit’ business. It might only be natural for consumers to drop their guards when they are met with the word ‘non-profit’. But one has to be aware of the fact that not all these organization have your best interest in mind.
Experts suggest that people who are looking for assistance from credit counsellors should be cautious with the choices they make. It is important to understand the fee structure and look into the structure more deeply if they operate on the basis of percentages and commissions. You should understand points such as who pays the commissions, you or the credit card company. Also be sure to check out if the agency gets a kickback from the credit card company from the outstanding amount when it repaid, since that is something that is likely to have an effect on the way the agency works with you.
http://www.bankruptcyhome.com/creditwoes.htm
Now imagine this: tired of the growing debts and with no way out you decide to consult a ‘professional’. You go to a credit counsellor and let that person try to help you out of your debts only to find that they have put you in more trouble than you already were in when you started.
Needless to say, over the years because of changes in lifestyles and spending habits, many individuals have found themselves in a situation where they are too deep in debt. Unfortunately, at the same time there has also been an increase in the number of abusive practitioners who pose as credit counsellors only to make the situation much worse than it was in the beginning.
The traditional credit counselling agencies were small and local services whose main function was to lend a hand to consumers with guidance and education about budgeting and how to manage their debts. Each case is studied individually and depending on the individual consumer’s situation they will be directed towards debt management, or at the worst case, filing for bankruptcy.
However there has been a shift in the nature of these small agencies. For a start, a lot of them are not small anymore. Nor are they local. The trend in credit counselling agencies finds organizations that operate at a national level and adopt aggressive marketing strategies to break through to the public. It is not unusual to see these credit counselling agencies selling their pitch by advertising through television, magazines, radio and the internet.
When going to a credit counselling agency keep in mind that most genuine agencies of this kind offer their services at a minimal fee. This fee that is charges is usually just enough to cover their expenses, thus they make the grade at a ‘non profit’ business. It might only be natural for consumers to drop their guards when they are met with the word ‘non-profit’. But one has to be aware of the fact that not all these organization have your best interest in mind.
Experts suggest that people who are looking for assistance from credit counsellors should be cautious with the choices they make. It is important to understand the fee structure and look into the structure more deeply if they operate on the basis of percentages and commissions. You should understand points such as who pays the commissions, you or the credit card company. Also be sure to check out if the agency gets a kickback from the credit card company from the outstanding amount when it repaid, since that is something that is likely to have an effect on the way the agency works with you.
http://www.bankruptcyhome.com/creditwoes.htm
Thursday, May 17, 2007
New Bankruptcy Reform Means Tes
With the new bankruptcy laws in effect, debtors will have to first pass a two-part means test before filing for Chapter 7 bankruptcy. First, a quick definition of Means Test: Means = Money, property, or other wealth (source: Dictionary.com)
Your Income Vs. Your State's Median Income
In the first part of the means test, your monthly income multiplied by 12 is compared to your state's median annual income. Your state's median income would be below your state's highest incomes and above your state's lowest incomes.
If your income falls at or below your state's monthly median income, then your Chapter 7 bankruptcy filing will likely be successful. On the other hand, if your monthly income does not fall below your state's median income, then your income will then be factored into a formula. Your formula results will determine your ability to file for Chapter 7 bankruptcy.
Means Test Formula
Under the Means Test, any creditor, trustee or judge will look at your monthly income, minus certain living expenses like food and rent. Your Chapter 7 bankruptcy will likely be successful if you are unable to pay at least $6,000 over the next five years ($100 per month). However, if you can pay at least $10,000 over five years ($166.67 per month or more) your Chapter 7 bankruptcy will likely be denied.
If you could afford more than $6,000 but less than $10,000 over five years, then a mathematical calculation determines whether your Chapter 7 filing will likely be successful or not. If you could afford to pay 25% or more of your unsecured debt, then a Chapter 7 will likely be denied. If you can't afford to pay 25% of your unsecured debt, your Chapter 7 filing will likely be successful. Examples of unsecured debts would include medical and credit card bills. Note that you can still opt for Chapter 13 in either of these cases.
Conclusion
You should be aware that the new bankruptcy law lets the government decide what is best for you. The updates take away discretion from the Judges to judge cases based on individual circumstances. It is doubtful that the courts can make exceptions for results.
ABOUT THE AUTHOR
Jeffery J. Aleman is a managing partner with Legal Helpers specializing in consumer bankruptcy law.
Legal Helpers is a debt relief agency helping people to file for bankruptcy relief under the bankruptcy code. With over 25 offices throughout the country and attorneys answering the telephones six days a week, their firm is always striving to provide the highest level of client service available. Legal Helpers aggressive representation and extensive experience have earned Attorneys Macey and Aleman a national reputation for excellence in the representation of Debtors in financial distress.
Legal Helpers can be contacted by phone at (888)743-5787 or email them at info@legalhelpers.com or visit their web site at www.legalhelpers.com
Your Income Vs. Your State's Median Income
In the first part of the means test, your monthly income multiplied by 12 is compared to your state's median annual income. Your state's median income would be below your state's highest incomes and above your state's lowest incomes.
If your income falls at or below your state's monthly median income, then your Chapter 7 bankruptcy filing will likely be successful. On the other hand, if your monthly income does not fall below your state's median income, then your income will then be factored into a formula. Your formula results will determine your ability to file for Chapter 7 bankruptcy.
Means Test Formula
Under the Means Test, any creditor, trustee or judge will look at your monthly income, minus certain living expenses like food and rent. Your Chapter 7 bankruptcy will likely be successful if you are unable to pay at least $6,000 over the next five years ($100 per month). However, if you can pay at least $10,000 over five years ($166.67 per month or more) your Chapter 7 bankruptcy will likely be denied.
If you could afford more than $6,000 but less than $10,000 over five years, then a mathematical calculation determines whether your Chapter 7 filing will likely be successful or not. If you could afford to pay 25% or more of your unsecured debt, then a Chapter 7 will likely be denied. If you can't afford to pay 25% of your unsecured debt, your Chapter 7 filing will likely be successful. Examples of unsecured debts would include medical and credit card bills. Note that you can still opt for Chapter 13 in either of these cases.
Conclusion
You should be aware that the new bankruptcy law lets the government decide what is best for you. The updates take away discretion from the Judges to judge cases based on individual circumstances. It is doubtful that the courts can make exceptions for results.
ABOUT THE AUTHOR
Jeffery J. Aleman is a managing partner with Legal Helpers specializing in consumer bankruptcy law.
Legal Helpers is a debt relief agency helping people to file for bankruptcy relief under the bankruptcy code. With over 25 offices throughout the country and attorneys answering the telephones six days a week, their firm is always striving to provide the highest level of client service available. Legal Helpers aggressive representation and extensive experience have earned Attorneys Macey and Aleman a national reputation for excellence in the representation of Debtors in financial distress.
Legal Helpers can be contacted by phone at (888)743-5787 or email them at info@legalhelpers.com or visit their web site at www.legalhelpers.com
How To Rebuild Credit After Bankruptcy
Your ability to reestablish credit after filing bankruptcy is better than it has ever been. After you receive your bankruptcy discharge, you will receive solicitations from lenders offering to finance homes, vehicles and credit cards. Here are some tips on responsibly and successfully reestablishing your credit after bankruptcy:
1. Open a checking or savings account. Lenders may look at this to determine if you can responsibly handle your cash flow.
2. Pay your utility bills and rent on time for at least a year.
3. Apply for store and gas credit cards that you would normally pay cash.
4. Apply for a secured card where you deposit cash and charge against it. Be sure to pay advances back over two months so that they will be reflected as positive marks on your credit report.
5. Look for car dealers and mortgage brokers that attest to be "bankruptcy friendly lenders".
6. Stay away from payday loans that are at high interest rates and are a "bad credit" trap.
7. Live within your means. Do not unnecessarily increase your debt to income ratio by taking on credit to purchase luxury items that you DO NOT NEED. Your payments on consumer debt should equal no more than 20% of your expendable income after costs for housing and a vehicle.
8. Pay your reaffirmed, pre-bankruptcy debts on time.
9. Write a letter to each credit reporting agency explaining the circumstances that lead to your bankruptcy filing.
10. Find a friend or relative to cosign for you on a loan and pay it on time.
ABOUT THE AUTHOR
Legal Helpers is a debt relief agency helping people to file for bankruptcy relief under the bankruptcy code. With over 25 offices throughout the country and attorneys answering the telephones six days a week, their firm is always striving to provide the highest level of client service available. Legal Helpers aggressive representation and extensive experience have earned Attorneys Macey and Aleman a national reputation for excellence in the representation of Debtors in financial distress.
Legal Helpers can be contacted by phone at (888)743-5787 or email them at info@legalhelpers.com or visit their web site at www.legalhelpers.com
1. Open a checking or savings account. Lenders may look at this to determine if you can responsibly handle your cash flow.
2. Pay your utility bills and rent on time for at least a year.
3. Apply for store and gas credit cards that you would normally pay cash.
4. Apply for a secured card where you deposit cash and charge against it. Be sure to pay advances back over two months so that they will be reflected as positive marks on your credit report.
5. Look for car dealers and mortgage brokers that attest to be "bankruptcy friendly lenders".
6. Stay away from payday loans that are at high interest rates and are a "bad credit" trap.
7. Live within your means. Do not unnecessarily increase your debt to income ratio by taking on credit to purchase luxury items that you DO NOT NEED. Your payments on consumer debt should equal no more than 20% of your expendable income after costs for housing and a vehicle.
8. Pay your reaffirmed, pre-bankruptcy debts on time.
9. Write a letter to each credit reporting agency explaining the circumstances that lead to your bankruptcy filing.
10. Find a friend or relative to cosign for you on a loan and pay it on time.
ABOUT THE AUTHOR
Legal Helpers is a debt relief agency helping people to file for bankruptcy relief under the bankruptcy code. With over 25 offices throughout the country and attorneys answering the telephones six days a week, their firm is always striving to provide the highest level of client service available. Legal Helpers aggressive representation and extensive experience have earned Attorneys Macey and Aleman a national reputation for excellence in the representation of Debtors in financial distress.
Legal Helpers can be contacted by phone at (888)743-5787 or email them at info@legalhelpers.com or visit their web site at www.legalhelpers.com
Health, Health Care Insurance and Bankruptcy
Imagine for a moment that your health has taken a turn for the worse. You need extensive medical attention and expensive treatments. Would you be prepared to account for these medical costs? Or would you or a family member ultimately have to deal with this financial burden? Surely, you would not want to suffer the consequences of paying big medical bills on your own. This is why health insurance is so important. A Harvard study conducted in 2001 found that medical bills caused half of all bankruptcies. Therefore, you should make sure that you have some form of medical insurance. You should also make sure that your money is well-spent on insurance that meets your needs.
Insurance Provided by Employer
You should feel lucky if you are in the minority of people who receive health insurance through your employer. According to bankrate.com, company health insurance is actually part of a group insurance plan. Your employer pays for most of your insurance and also pays for your insurance with portions of your paychecks. Everyone in your group plan pays the same rate. The premiums paid by healthy members go towards paying the bills of sick members. Bankrate.com recommends that you study up on your employee benefits package to make sure that the insurance plan you choose provides you with the services and options you will need. If you are young and/or relatively healthy, you may want to consider choosing to pay for your company's cheapest health plan.
Bankrate.com also recommends that you review your insurance plan periodically. You may be paying more money for services you no longer need. For example, if you have children that have graduated from college or are no longer on your insurance plan, you should change your insurance plan accordingly. Additionally, if you have lost weight or quit smoking, you could qualify for a cheaper insurance plan.
Have You Been Laid Off?
If you have recently lost your job, you may want to consider the Consolidated Omnibus Budget Reconciliation Act (or COBRA) plan. With a COBRA plan, you pay for the medical benefits your former employer paid for on your own. The plan lasts up to 18 months. Keep in mind that the COBRA plan is a bit expensive. In addition to paying the premiums your company used to pay, you would also have to pay a 2% service fee.
Are You Uninsured?
Unfortunately, according to bankrate.com you may face discrimination from insurance companies if you try to insure yourself on your own. You may have difficulty buying insurance if you have any medical problems whatsoever. Remember, with a company group insurance plan, your insurance provider only has to pay the medical bills of the sick members in the group.
Look for health plans that have higher premiums. You may pay more upfront for medical coverage, but you will ultimately spend less on deductibles. At the very least, financial analyst Suz Orman recommends paying for worst-case-scenario insurance for medical bills that top $5,000. This way you can at least be sure that you will not have to foot the entire bill for high costs.
Conclusion
No one wants to live their life fearing the worst. By insuring yourself, you can at least rest assured knowing that you are prepared if your health takes a turn for the worse. As a result you or your family would not have to suffer the additional hardship of having to pay for your medical costs yourself. The good news is that if you can not afford insurance coverage, filing bankruptcy could eliminate your medical bills if necessary.
http://www.debtriddance.com/articles/health_care.html
Insurance Provided by Employer
You should feel lucky if you are in the minority of people who receive health insurance through your employer. According to bankrate.com, company health insurance is actually part of a group insurance plan. Your employer pays for most of your insurance and also pays for your insurance with portions of your paychecks. Everyone in your group plan pays the same rate. The premiums paid by healthy members go towards paying the bills of sick members. Bankrate.com recommends that you study up on your employee benefits package to make sure that the insurance plan you choose provides you with the services and options you will need. If you are young and/or relatively healthy, you may want to consider choosing to pay for your company's cheapest health plan.
Bankrate.com also recommends that you review your insurance plan periodically. You may be paying more money for services you no longer need. For example, if you have children that have graduated from college or are no longer on your insurance plan, you should change your insurance plan accordingly. Additionally, if you have lost weight or quit smoking, you could qualify for a cheaper insurance plan.
Have You Been Laid Off?
If you have recently lost your job, you may want to consider the Consolidated Omnibus Budget Reconciliation Act (or COBRA) plan. With a COBRA plan, you pay for the medical benefits your former employer paid for on your own. The plan lasts up to 18 months. Keep in mind that the COBRA plan is a bit expensive. In addition to paying the premiums your company used to pay, you would also have to pay a 2% service fee.
Are You Uninsured?
Unfortunately, according to bankrate.com you may face discrimination from insurance companies if you try to insure yourself on your own. You may have difficulty buying insurance if you have any medical problems whatsoever. Remember, with a company group insurance plan, your insurance provider only has to pay the medical bills of the sick members in the group.
Look for health plans that have higher premiums. You may pay more upfront for medical coverage, but you will ultimately spend less on deductibles. At the very least, financial analyst Suz Orman recommends paying for worst-case-scenario insurance for medical bills that top $5,000. This way you can at least be sure that you will not have to foot the entire bill for high costs.
Conclusion
No one wants to live their life fearing the worst. By insuring yourself, you can at least rest assured knowing that you are prepared if your health takes a turn for the worse. As a result you or your family would not have to suffer the additional hardship of having to pay for your medical costs yourself. The good news is that if you can not afford insurance coverage, filing bankruptcy could eliminate your medical bills if necessary.
http://www.debtriddance.com/articles/health_care.html
Wednesday, May 16, 2007
Mortgage After Bankruptcy
Most people probably assume that obtaining a mortgage to purchase a home, refinance or to consolidate debt after a bankruptcy is out of the question. In fact, many people are able to obtain these mortgage services, even 1 day after a bankruptcy discharge in some cases. Loan programs and lenders are available that require little or no time after the discharge of a bankruptcy. Here are a few tips to speed up the road to credit recovery and the mortgage services you desire.
First, continue timely paying on items such as your home and cars that were not discharged in the bankruptcy. Having at least a couple credit items you are paying on- time will help. Second, limit the amount of other debts such as credit cards or bank loans. Too much debt will make it more difficult to qualify for a loan, particularly revolving credit accounts such as credit cards. Your debt-to-income ratio is one part of the puzzle lenders will look at in determining your ability to repay a mortgage.
Another important aspect is providing all necessary documents in a timely manner to your loan consultant. Items such as paystubs and tax returns are generally needed in order to establish your income and show the ability exists to repay the loan. Information on your credit report needs to be checked for accuracy. Items that you feel are inaccurate need to be disputed in writing with the three major credit repositories. (Equifax, Experian and Trans Union). This may take persistence to ensure the items are removed appropriately. The removal of this inaccurate information will help establish a more favorable debt-to-income ratio and make the process of qualifying for a loan easier. Finally, if you are unable to qualify for a loan initiallyScience Articles, do not despair. Sometimes this process requires a little patience. Follow the tips mentioned earlier and more options are usually available 6 months to a year after the bankruptcy discharge. Your Amerinet Loan Consultant can help guide you through this process
Read more about Dallas Bankruptcy And Mortgage http://www.bankruptcyhome.com/dallas-bankruptcy.htm
ABOUT THE AUTHOR
Original content from Dallas Bankruptcy
You can email us by clicking here or info@bankruptcyhome.com
First, continue timely paying on items such as your home and cars that were not discharged in the bankruptcy. Having at least a couple credit items you are paying on- time will help. Second, limit the amount of other debts such as credit cards or bank loans. Too much debt will make it more difficult to qualify for a loan, particularly revolving credit accounts such as credit cards. Your debt-to-income ratio is one part of the puzzle lenders will look at in determining your ability to repay a mortgage.
Another important aspect is providing all necessary documents in a timely manner to your loan consultant. Items such as paystubs and tax returns are generally needed in order to establish your income and show the ability exists to repay the loan. Information on your credit report needs to be checked for accuracy. Items that you feel are inaccurate need to be disputed in writing with the three major credit repositories. (Equifax, Experian and Trans Union). This may take persistence to ensure the items are removed appropriately. The removal of this inaccurate information will help establish a more favorable debt-to-income ratio and make the process of qualifying for a loan easier. Finally, if you are unable to qualify for a loan initiallyScience Articles, do not despair. Sometimes this process requires a little patience. Follow the tips mentioned earlier and more options are usually available 6 months to a year after the bankruptcy discharge. Your Amerinet Loan Consultant can help guide you through this process
Read more about Dallas Bankruptcy And Mortgage http://www.bankruptcyhome.com/dallas-bankruptcy.htm
ABOUT THE AUTHOR
Original content from Dallas Bankruptcy
You can email us by clicking here or info@bankruptcyhome.com
Debt Consolidation Loan Scams and How To Avoid Them
Many people who badly need money make the mistake of doing business with companies that steal money from them rather than lend it. These scams are usually directed at people who already have bad credit. More people are in financial trouble than ever before, and many criminals are taking advantage of this situation. Those who are filing for credit counseling or bankruptcy are at a high risk for these types of scams. Here I will show you common scams and what you can do to avoid them.
Money Up Front Scams
If you are in a situation where you need to file bankruptcy or seek credit counseling, your life is likely already hard enough as it is. The last thing you want is some con artist taking more of your money. Unfortunately, a huge market exists for these types of scams. The most common trick used by debt consolidation services is to make an offer to loan a client money despite their credit history. They will ask that the client pays three months in advance before they are able to loan them money. The company then takes the payments and refuses to loan the client money, stealing from them.
Many of the customers never hear from the company again. Many of these companies make themselves appear legitimate by purchasing advertising space in the local phone book, a place that most people trust to find their information. As more people suffer from debt, these scams will continue to increase.
You should avoid any lender which asks you to pay money up front for the loan. This is generally the first sign that a service is likely a scam. There is no reason you should have to pay a fee up front. Any lenders which ask you to pay before you receive the money are likely con artists. You should only have to pay money back after you've been given money, not before. Many of these services will also try to get you to send out a wire transfer.
Wire transfer services like Western Union are not secure, and there is no recourse available if something goes wrong. The transactions can't be traced, and you should avoid any services which ask you to wire money to them. If you feel the need to borrow money, you should use a service which is recommended by a friend or member of your family. This is much better than calling a random service which you've never heard of.
A Word On The Side Of Caution
It is important to be cautious when looking for loans, especially those which are unsecured. The first thing you should realize is that there is no such thing as a loan which is guaranteed. You should be wary of lenders who promise that you will be approved without bothering to check your credit history.
It is an unfortunate fact of life that many people make a career out of stealing money from others. Much of this fraud is perpetrated by groups which are highly organized. Getting scammed in a situation where you are already on the verge of bankruptcy can be enough to push anyone over the edge. People tend to make the most mistakes when they are desperate. It is important to analyze the situation and study the lender carefully. Anytime you are asked to pay money up front this typically means that it is a fraud, and will not end well if you fall for it.
The most important thing you can do before choosing a lender is to do research. Find out how long a company has been in existence. If they don't have an established history, this likely means they are a fly by night operation, and you will want to avoid it.
About the Author
Joseph Kenny writes for the Personal Loans Store and provides more information on debt consolidation loans available on site.
Money Up Front Scams
If you are in a situation where you need to file bankruptcy or seek credit counseling, your life is likely already hard enough as it is. The last thing you want is some con artist taking more of your money. Unfortunately, a huge market exists for these types of scams. The most common trick used by debt consolidation services is to make an offer to loan a client money despite their credit history. They will ask that the client pays three months in advance before they are able to loan them money. The company then takes the payments and refuses to loan the client money, stealing from them.
Many of the customers never hear from the company again. Many of these companies make themselves appear legitimate by purchasing advertising space in the local phone book, a place that most people trust to find their information. As more people suffer from debt, these scams will continue to increase.
You should avoid any lender which asks you to pay money up front for the loan. This is generally the first sign that a service is likely a scam. There is no reason you should have to pay a fee up front. Any lenders which ask you to pay before you receive the money are likely con artists. You should only have to pay money back after you've been given money, not before. Many of these services will also try to get you to send out a wire transfer.
Wire transfer services like Western Union are not secure, and there is no recourse available if something goes wrong. The transactions can't be traced, and you should avoid any services which ask you to wire money to them. If you feel the need to borrow money, you should use a service which is recommended by a friend or member of your family. This is much better than calling a random service which you've never heard of.
A Word On The Side Of Caution
It is important to be cautious when looking for loans, especially those which are unsecured. The first thing you should realize is that there is no such thing as a loan which is guaranteed. You should be wary of lenders who promise that you will be approved without bothering to check your credit history.
It is an unfortunate fact of life that many people make a career out of stealing money from others. Much of this fraud is perpetrated by groups which are highly organized. Getting scammed in a situation where you are already on the verge of bankruptcy can be enough to push anyone over the edge. People tend to make the most mistakes when they are desperate. It is important to analyze the situation and study the lender carefully. Anytime you are asked to pay money up front this typically means that it is a fraud, and will not end well if you fall for it.
The most important thing you can do before choosing a lender is to do research. Find out how long a company has been in existence. If they don't have an established history, this likely means they are a fly by night operation, and you will want to avoid it.
About the Author
Joseph Kenny writes for the Personal Loans Store and provides more information on debt consolidation loans available on site.
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