When you are struggling financially, there are a variety of debt relief options available to you. It is important to understand that some are good options and some are not. Most of our blogs focus on the options we believe you should strongly consider, but this blog will examine some of the alternatives you should avoid:
- Mortgage Rescue Scams.If you are a struggling homeowner, the last thing you need is to get caught in a scam. One of the common mortgage rescue scams occurs when you sell your home to the con artist who then rents it back to you. When you get back on your feet, you have the option to buy your home back. The scam occurs because you are charged outrageous fees and a high interest rate, which typically results in you being worse-off financially than before you got “rescued.” If a party makes claims that seem too good to be true, they probably are!
- Debt Consolidation Loans. Consolidating your loans can be a good move, but you have to be smart when you do it. You may be promised an extremely low interest rate, but be sure to read the fine print! Many of these types of loans contain costly penalties and fees that end up costing you more than you were paying before the consolidation.
- Credit or Debt Counseling. This type of program often involves the consumer making a monthly payment to the company who claims they will negotiate with your creditors to settle your debts. However, the program typically only lasts for one year and during that year the money you are paying will be applied to their “fee,” not to reducing your debt. In fact, it is possible that you may get sued before the company ever contacts your creditors to discuss settlement!
- Check Cashing or Payday Loans. This type of loan should be avoided at all costs. You will never get out of debt if you are paying a credit card with a 23% interest rate by using a payday loan of over 400%.
- Pro Se Bankruptcy. If you attempt to file a Chapter 7 or Chapter 13 case without the assistance of an attorney, you will likely spend more than you would have by retaining a lawyer. To learn more, please read our blog titled “Filing Bankruptcy Without an Attorney May Cost You More.”
At DeLadurantey Law Office, LLC, we help businesses and families find their way out of highly difficult financial situations. We provide the advice and guidance you need in obtaining debt relief through bankruptcy and debt negotiations. We can also assist you in student loan law and defending a foreclosure action. Contact us at 414-377-0518 to discuss how our Milwaukee bankruptcy attorneys can assist you. Like us on Facebook.