It has been a tough year. For many, the effects of the COVID-19 pandemic have seeped into their financial lives. Whether because of a lost job or reduced hours, when people suffer the loss of income, it is a trying time. As they struggle to keep up with credit card debt, automobile loans, and medical debt, they look for solutions and options.

During these times, good-faith people look for answers and strategies to pay their bills. Sadly, criminals use these times to their benefit. Although they promise to help you escape from your credit nightmare, they most often only take your money. People who want relief from their debts can become unwitting victims of such criminality if not careful.

Debt relief schemes target consumers with large credit card balances by deceptively marketing their debt relief services. They promise to negotiate with creditors to reduce or settle the consumers’ repayment obligations. The insidious thing about these “services” is that they charge already burdened individuals with large up-front fees. However, they fail in lowering debt obligations. Some have been known to take the money and run; others simply prove utterly ineffectual for the job at hand.

Credit repair scams target the same financially distressed individuals with credit problems. These scam artists convince consumers that they can remove negative listings in a personal credit report, even if the report’s information is accurate. They can’t – and they don’t.

Did You Know? Much like debt relief service scams, auto loan modification scams target cash-strapped individuals in danger of losing their car or truck. These criminals promise that they can reduce the monthly car payment to help avoid repossession of the vehicle.

Regulatory agencies have taken thousands of legal actions against these “services” over the years. Consumers need to note that the Telemarketing Sales Rule protects them from the practices described above. The Rule prohibits for-profit companies who solicit over the telephone from collecting any fee unless they do what they promise – relieve the clients’ debt load. The Rule also makes it illegal to make misrepresentations and disclose all pertinent information about their services.

Unfortunately, there is no quick and easy way to get yourself out of debt, but it can be done. You may wish first to try to set up modified payment plans with your creditors. They are interested in getting paid, even if the monthly amount is less than they prefer. Your good-faith effort, combined with being upfront about your situation, may sometimes produce the relief you need. You should also seek credit counseling.

Just remember that a reputable debt relief service will not force you to pay anything upfront – in fact, this practice is illegal. They will also not guarantee success in having your debts forgiven or that your credit score can be repaired. No matter how persuasive they sound, these two items are critical red flags, and the company should be reported for fraudulent practices.

When Bankruptcy is an Option

Contrary to the scammers’ false claims, personal bankruptcy can deliver on debt relief through the court system. While filing for bankruptcy is a serious decision with real implications, it is also a legal proceeding in which consumers can have the fresh start they desire.

If you are overwhelmed with debt and seeking a legitimate way out, call Sarasota bankruptcy attorney Richard V. Ellis. Together, you will review your personal financial situation, discuss credit counseling, and decide which form of bankruptcy is right for you. Through that proceeding, many of your debts can be legally discharged or paid back through monitored payment plans which protect you and the creditor.

Financial hardship can be scary and exhausting – don’t let the scammers make it worse. Call Richard Ellis today.