However, there are companies that would rather take your money than help you. To avoid such scams, watch out for the following.
Low Monthly Payment Claims
While debt consolidation companies can lower your interest rate which might lower your payments, they cannot negotiate lower minimum payments. Creditors no longer accept smaller payments since 2004, not even for “hardship” cases.
One trick companies use is to lure customers in with a low quote, only to jack up the required payment in a month’s time. By that time you have already paid out fees, which aren’t refundable.
Upfront Fees
Another shady practice is to charge large upfront fees when a company is claiming non-profit status. Legitimate companies will either charge a small monthly fee between $14 to $69, depending on the number of accounts. The other fee structure is to charge a reasonable fee for each account handled; typically for-profit companies use this structure.
If you are being asked to pay thousands, especially with a cashier’s check or money order, look for another program.
