Debt Relief in Hard Financial Times

Most Americans are feeling the economic crunch and undergoing their own share of tough times because of the economy. People are having difficulty in managing their own finances. The unemployed work force is growing in numbers. This scenario makes one focus of their financial security. The Obama administration wants to provide debt relief for individuals who are momentarily having their share of personal financial dilemma as long as they qualify.
The growing interest rates has caused more than one American to walk away from their mortgages that even the banking industry has coined a nickname for it calling it strategic mortgage defaults. The reason for using a debt relief may be due to the following reasons:Image result for Debt Relief in Hard Financial Times

  • Some homeowners cannot find a lender who is willing to offer a home refinancing deal since the home has lost its value. This move on the part of the homeowners may sometime force lenders to enter into a revision on their loan by conducting an open dialogue between the homeowner and the lender.
  • Because of legitimate reasons such as sudden illness and loss of work homeowners are betting that loan officers will empathize with them enough to take a long time before they foreclose the home owner’s property. This gives them time to catch up on their payments.

An astute observation made by the credit bureau through a research study showed that Americans use debt relief as a calculated move to for a short term financial gain. The basis of this is that the individuals who are availing for a debt relief usually show no outward signs of economic stress. Other people on the other hand have found that the present government offers Government grant for people who may be going through a tough spot. These grants are only given to the real needy ones.  If you are drowning in debt and have no options then the government is willing to give you the grant.  People who qualify for debt relief are those who have loss a job, divorce, medical bills and many more valid reasons.

It is a very wise decision to seek credit counseling to help you get back on your feet. Do not jump into filing for bankruptcy because there are still better options than that. You can seek help on how to create your budget, how to control your spending and how to save for the future. If your income is lower than your bills it only means you are living beyond your means.  This may also imply that you need to drop some of the luxuries that you usually can live without so that your life will improve financially. Your main goal is after debt relief you must be debt free by following this simple rules.

How to Avoid Debt Relief Scams

If you find yourself in a debt situation that makes you feel as if you have no way out then do not let yourself fall victim to debt relief scams. The most undesirable type of scams is one that is categorized as organize criminal activity. They will sweet talk people in giving them their money presumably to help them negotiate with their creditors but in reality they will just take their victim’s money and run away with it. To avoid entrapment or leaving a paper trail behind they would usually ask for cash. These unscrupulous characters go to extra lengths to keep their identity anonymous by changing their fake company names and fake websites that can easily be made offline.

Another scam is the one who says that you can claim US government grants to help you with your debts. They ask for monthly subscriptions but later on after you have paid them, you will come to know that it is all a scam. There are ways of knowing which ones is scam and which one are for real. If the company does not give a full office address with all the necessary details and only uses a P.O. Box, then chances are these addresses are just dummies. To check on whether your present debt relief company is actually paying your debts on your behalf, you can call your creditors directly.

You are much safer if you get the services of a non-profit agency that conforms to the AICCCA standards (Association of Independent Consumer Credit Counseling Agencies). One fact that you might have overlooked is that most creditors would appreciate it if you decide to communicate with them to address your specific financial dilemma.

Some debt settlement scams are as follows:

  • These companies will not provide you the complete details on how they would help you deal with your settlement process
  • They offer to take preventive measures so that harassing phone callers will stop subjecting to their irritating calls but in reality they will not make a move as they say they would
  • They hide from the consumer the actual amount that these consumers need to pay and say that they can help these consumers to save a lot
  • They would suggest for you to stop paying your creditor balances or monthly dues and instead open a savings account but they are the only ones who will keep the details of your account without you knowing anything. Wake up since they are on the run with what little money you have left!

There are those who offer fake credit repair services to supposedly help you improve on your credit score. They will charge you with up front payments that are against the law. Never divulge any personal financial information especially about your bank account. It is your responsibility to guard yourself against such illegal practices after knowing the basic scamming techniques that people will use to take advantage of you even if you are up to your neck in personal debts. As long as there is life there is still hope that one day you can recover from these financial losses.