Getting Out Of Debt- Be Careful When Choosing A Debt Management Company

For those in financial trouble, particularly with high interest credit card debts, debt management companies, also known as credit counseling organizations, can help you with getting out of debt, but you have to be careful. While there are several legitimate, non-profit debt management organizations all over the United States that do strive to help those in bad financial situations, there are many that claim to be non-profit, and then charge you hidden fees, or escape with your money when you make your first payment.

Just in the last few years the FTC, or Federal Trade Commission, has fined many of these so-called non-profit organizations for their underhanded, fraudulent ways. You may consult with one of these companies, and think that they really are out to help you, and that they will manage to get your debts in order, while all the while they are sitting back not lifting a finger that would benefit you. These companies offer many different services, from credit counseling, debt management, even to pre-bankruptcy counseling, when in the end; they are just there to take your money and run, with you ending up in an even more difficult financial situation than you started out in.

The first thing that many of these fraudulent companies do is to make it sound as though they have no interest in charging you any type of fee, reiterating over and over that they are a non-profit organization, there just for the sole purpose of helping people like you. Keep in mind, however, that there are very few companies out there that want or can afford to work for free, they have employees to pay, building rent or mortgage payments, business taxes, utilities, and other basic operating costs, not to mention turning a profit. Another potential warning sign that the company may not be on the up and up is that they promise that they can make you be debt-free, and that you wo not have to file bankruptcy, no matter how much you owe, or how far behind you are.

If you do not have any income coming in, at least nothing that is not being taken up by basic necessities, how are they going to make you be debt-free? Are they going to pay your bills on your behalf? These companies will also tell you over and over again how much better their program is than just filing bankruptcy, and will try their best to convince you that if you do not immediately sign with them, that you will have to file bankruptcy. They urge you to sign a contract from the very first phone conversation or meeting, refusing to give you time to look things over, or consider other options. You may also be led to believe that your credit will be miraculously repaired by joining their program, when in fact, the opposite is usually the case.

You should know that there are debt management companies out there that are truly non- profit, and sincerely do want to help people learn how to effectively manage their money, and get out of debt. The thing is, when you are working so hard at getting out of debt, it is easy to be taken in by the promises that are made by these fraudulent companies, so you have to take the time to do your homework, researching each organization completely, before making a final decision.