Protect yourself: Know the signs of debt relief scams

There is no doubt that struggling with debt is difficult. It can significantly strain one's financial and emotional health, as they stress about how to pay off debts and cover monthly expenses at the same time. 

The stress and stigma of debt can make individuals want to find the fastest route to debt relief as possible. This is understandable, but people must be aware of scams that prey on those struggling with debt. 

Knowing the signs of a debt relief scam can help New Mexicans avoid significant financial consequences. Not every scam is the same, but some of the most common signs include:

1. If they promise or guarantee debt relief

The Federal Trade Commission states that no legitimate agency can promise that creditors will forgive someone's debts. So, a sure sign of a debt relief scam is if the agency or individual guarantees that they can clear all of someone's debts.

Individuals should also take it as a warning sign if the agency claims they can achieve that debt relief by a specific date in the near future. 

2. If they require up-front payment

A debt relief agency should not require fees or any other type of payment from an individual before they provide any services. Legitimate debt relief services should only request payment after services are rendered.

3. They pressure you

One of the most common signs of a debt relief scam is if the agency pressures individuals to act. They often have aggressive sales strategies that urge individuals to act quickly or warn them that this debt relief option is a limited time offer.

They might also pressure individuals for their personal information, such as:

  • Credit card numbers;
  • Bank account numbers;
  • Or other financial account information.

Many schemes say they will not provide services unless they receive this information first. But no one should have to give out their information just to obtain help. 

Bankruptcy is a constitutional system of debt relief

The American Association of Retired Persons (AARP) provides tips on how to handle debt relief scams. Older individuals are often the targets of these scams, but everyone can benefit from these tips. Additionally, understanding these warning signs can help individuals stop this dangerous fraud and avoid the consequences.

Unfortunately, the stigma surrounding debt and bankruptcy can lead many people to search for the fastest solution available. However, individuals must take some time to consider their options. These scams can often make someone's financial issues even worse. 

Filing bankruptcy is often an option for individuals to find debt relief while also protecting their financial future.

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