Avoiding Debt Relief Scams: Insights From the Law Offices of Wenarsky and Goldstein, LLC

Learn how to identify and avoid debt relief scams and find legitimate debt relief solutions with this comprehensive guide from the Law Offices of Wenarsky and Goldstein, LLC.

What Are Debt Relief Scams?

A debt relief scam occurs when a company or individual promises to help an indebted person get out of debt without the means or intention to fulfill that promise.

Debt relief scammers are master illusionists, adorning their traps with seeming legitimacy – a convincing website, promising testimonials, and official-sounding correspondence. However, beneath this facade, the consumer often discovers too late that the promised services never materialize or fall gravely short of their expectations. 

The harm caused by debt relief scams is significant and multi-faceted. Victims often lose money they can’t afford after paying high charges for services that are never delivered or are of little value. This can send them deeper into financial distress, making it even harder to climb out of debt. Furthermore, the false promises of debt relief can lead victims to delay seeking legitimate help or exploring other viable options, prolonging their financial suffering and emotional distress.

At the Law Offices of Wenarsky and Goldstein, LLC, we understand that people dealing with overwhelming debts are vulnerable and desperate for solutions. We are dedicated to helping such people in New Jersey and New York find genuine and legal solutions for effective debt management and relief.

As part of our commitment, we’ve prepared this handy guide to help people recognize and avoid debt relief scams and identify possible pathways to a fresh financial start. Please read on to learn more.

How Debt Relief Scams Work

Debt relief scams are fraudulent schemes designed to exploit individuals struggling with unmanageable debts. These scams promise quick and easy solutions to financial woes but often result in deeper financial distress and emotional harm. 

These scammers specifically identify and target individuals who are financially distressed using various channels such as online ads, emails, phone calls, and direct mail.  They lure their victims with false promises, claiming that they can negotiate with their creditors to 

  • Reduce debt
  • Consolidate debts into one manageable payment 
  • Eliminate the debts altogether.

Clearly, these promises are unrealistic, but most of the time, the scammers are aware of that fact. They know they cannot fulfill those promises; they just use their guarantees to lure unsuspecting debtors to get what they are really after- money.

Scammers usually demand high upfront fees or monthly payments for their “services.”  After collecting fees, scammers either provide a minimal service or none at all. They may fail to contact creditors, make negligible efforts, or disappear entirely. 

Sometimes, debt relief scams also involve elements of identity theft, leading to further financial damage.

Recognizing the Signs of a Debt Relief Scam

So, how do you identify a debt relief scam? Scams are deceptive by nature, and as such, they are not always easy to identify. 

However, if you are concerned about falling prey to a debt relief scam, it would be wise to look out for certain red flags before transacting with a debt relief company or agent, some of which are listed below:

Unsolicited Calls and Messages

If a debt relief company contacts you out of the blue with tempting debt relief offers, that could indicate a debt relief scam waiting to happen. 

Upfront Fees

If the company demands large upfront fees before providing services, that’s a huge red flag. Legitimate companies usually do not charge substantial fees before performing services. While there may be initial costs, most of the fees should come after the services paid for have been rendered.

Advising Debtors  to Stop Payments

Be wary of a debt relief company that advises you to stop paying your creditors or cease communications with them. 

Ceasing payments can lead to late fees, increased interest, and damaged credit. Legitimate advisors will help you manage payments, not avoid them.

High-Pressure Tactics

Scam companies typically use high-pressure sales tactics to get customers to sign up immediately.

A legitimate company should give you time to consider your options and won’t pressure you into making quick decisions.

Guarantees of Specific Results

Scam companies will usually guarantee that they’ll be able to achieve specific outcomes, such as a certain percentage of debt reduction or complete debt elimination.

No company can guarantee specific results as debt relief depends on negotiations with creditors, which can vary widely.

How to Avoid Debt Relief Scams

Caution is the key to avoiding being the victim of a debt relief scam. Whether or not you spot any red flags, conducting thorough research into any company offering debt relief services is prudent. A legitimate company should have a traceable history of helping consumers with debt management. 

Also, be careful with your personal information; do not divulge sensitive details during robocalls or to unverified debt relief providers.

When in doubt, it might be best to consult an established lawyer to help you confirm the genuineness of the debt relief services you’re being offered. We at the Law Offices of Wenarsky and Goldstein, LLC, can provide you with the neededguidance and counsel to help you protect yourself from scammers while working toward legitimate debt relief solutions for you.

Are There Legitimate Debt Relief Companies?

There are legitimate debt settlement companies that specialize in helping debtors renegotiate their debts with creditors through debt consolidation or restructuring.

While the services of such companies might be beneficial in some cases, there are several reasons why using a debt recovery company might be ineffective:

  • Debt relief companies can only renegotiate a debt with a willing creditor. If the creditor refuses to participate, the company cannot compel their cooperation.
  • Debt relief companies often charge high fees for their services. These fees add up quickly, increasing your financial burden and making it harder to get out of debt.
  •  Part of the debt relief process might involve stopping payments to creditors for a while. If you stop paying your debts while seeking debt relief, creditors might take legal action against you.

Working with a debt relief company to manage your debts can be very expensive and might not yield the desired results. Before transacting with such companies, it may be wise to consider other options before choosing a debt relief path. 

Bankruptcy: A Viable Option for Comprehensive Debt Relief

If you’re looking for a legal solution that can help you overcome your overwhelming debts, it might be time to consider filing for bankruptcy.

Bankruptcy is a legal process that allows people who cannot pay their debts to eliminate some or all of them or make a plan to pay them back under the court’s protection.

Under the Bankruptcy Code, there are different types of bankruptcy, with Chapter 7 and Chapter 13 being the most common. Each type of bankruptcy has different legal requirements and implications, so it is important that you fully understand the option that best suits your situation before filing a bankruptcy petition.

Bankruptcy offers several benefits, including the following:

  • The Automatic Stay: When you file for bankruptcy, an automatic stay goes into effect. Once activated, this legal barrier can stop most creditors from trying to collect debts from you (depending on whether you have secured or unsecured debts), giving you some breathing room.
  • Debt Discharge: Bankruptcy can eliminate many types of debts, meaning you no longer have to pay them back at the end of the process. Debts that can be discharged are primarily unsecured debts such as credit card debt, medical bills, and personal loans.
  • Debt Repayment Plans: Bankruptcy (Chapter 13) can help create a manageable repayment plan, sometimes without needing creditor approval.
  • Protect Assets:  You don’t have to lose your assets because you file for bankruptcy. Certain types of bankruptcy will allow you to keep essential assets like your home and car while resolving your debt issues.

On the flip side, filing for bankruptcy will affect your credit score. But when you consider the benefits it offers, you might find that it is a path worth taking.

At the Law Offices of Wenarsky and Goldstein, LLC, we acknowledge the complex nature of bankruptcy and the importance of professional legal assistance in navigating its processes. We are committed to guiding debtors through each step so they can reap the maximum debt relief benefits possible under the bankruptcy system.

Contact the Law Offices of Wenarsky and Goldstein, LLC

When dealing with a mountain of debt, seeking solutions to help with your financial situation is natural. But no matter how desperate you might feel, it is important to be vigilant against debt relief scams to avoid losing more money and making your financial problems worse. 

It’s okay to seek professional help to manage your debts but you need to look to real and trustworthy sources for assistance.

At the Law Offices of Wenarsky and Goldstein, LLC, we understand that you need a comprehensive remedy to relieve your debt obligations or make them more manageable. Rather than making false promises, our commitment is to provide you with our experienced counsel to help you understand your options, particularly bankruptcy, and set you on the path to financial stability.

Contact us today, and let us help you find an effective debt relief solution tailored to your unique situation.

Call the Law Office of Wenarsky & Goldstein

At the Law Offices of Wenarsky & Goldstein, LLC, our New York and New Jersey attorneys are experienced and knowledgeable in bankruptcy, estate planning and probate, guardianship, special needs planning, and real estate law. To learn more about how we can assist you with your legal needs, call us today at 973-453-2838.