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Be wary of debt relief scams warns Senator Lassa

Getting into debt is something that usually doesn't take a considerable amount of time. For most people, getting out of that debt, though, is going to take time. Consumers who are in debt are usually willing to try a variety of options to pare down those debts, but some of the methods offered by companies aren't actually going to help at all. One Wisconsin Senator is warning consumers to be on the lookout for scam artists who are trying to make a quick dime off of your desire to get out of debt quickly.

Senator Lassa reminds consumers that debt management companies must be licensed to offer services in Wisconsin. She also says that these companies can't claim to negotiate lower payments with your creditors as part of their marketing scheme in the state.

These companies often prey on consumers who are desperately seeking a way to get on top of their finances. They often claim that they can get credit card companies and some other companies to reduce the amount of money a consumer owes; however, the money the consumer pays to the debt management company doesn't actually ever go to the creditor. By the time the consumer realizes this, they are out of the money they paid the scam company. They are also more in debt to the original creditors because lower payments haven't actually been negotiated and other fees have piled up on top of the balance owed when the consumer started working with the scam company.

Under a 2010 revision of the Telemarketing Sales Rules from the Federal Trade Commission, these companies aren't allowed to collect fees prior to actually renegotiating the consumer's debts. They also can't misrepresent the services they offer.

Among the list of warning signs Senator Lassa tells consumers to be on the lookout for are companies that claim to offer services under a new government personal bailout program for discharging credit card debt. She also warns consumers to be wary of companies that ask for voluntary contributions, upfront payments prior to negotiating debt relief or financial information prior to sending out information to you about the company. Claims of being able to stop lawsuits or collection calls, guarantees of being able to settle debts for pennies on the dollar, a willingness to sign you up for a program without taking an in-depth look into your financial situation and asking you to stop speaking to your creditors are all signs of a scam company.

If you are in a desperate need of debt relief, contacting an experienced Wisconsin bankruptcy attorney can help you to learn of legal ways you can gain a fresh financial start.

Source:  WisconsinRapidsTribune.com, "Lassa: Beware of financial scam artists" Senator Julie Lassa, Jan. 07, 2014

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