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Beware of debt consolidation companies

On Behalf of | Dec 4, 2014 | Care Planning

If you are a senior citizen who is toiling in debt, chances are you have seen a commercial, an advertisement of have been approached about a debt settlement program. These programs are designed to allow you to reduce your high interest debt, typically by having the company negotiate with your creditors so that you can save money and get out of debt at the same time.

If only it were that simple.

According to the Fair Trade Commission, there are some substantial risks that come with enrolling in a debt settlement program, including the obligation of depositing money you would have been paying to a creditor into a special savings account that is used to negotiate a settlement. Also, creditors are under no obligation to negotiate with you after you are in default with them. Finally, there are a number of unscrupulous debt management agencies who do not do what they promise.

Because of this, consumers should be wary debt settlement companies and do the following before entering into a program.

Do your homework – It is a good idea to check with your local Better Business Bureau or the Attorney General’s office to make sure there are no outstanding complaints against the company you plan to work with.

Know the fine print – The terms of the plan should be easy to understand, and the fine details should be clearly explained to you. If there is anything that you don’t understand, you should not feel compelled or pressured into working with the company.

If you have concerns, an experienced elder law attorney may be able to help you.