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What are warning signs of an unscrupulous debt relief company?

The desire of consumers to get debt relief can be a very powerful motivating force. Wayne County, Michigan, residents facing these issues may have noticed that there are a number of businesses that hold themselves out as able to secure this debt relief for stressed out or overburdened consumers. Normally skeptical members of the public may find the claims made by these companies to be attractive.

The Federal Trade Commission urges consumers to proceed with caution before signing up with a debt settlement companies. Some companies follow better business practices than do others. The government has offered a number of warning signs that a debt settlement company may be more interested in taking your money than actually helping you out.

For example, it is a major red flag if any company tells you that it can guarantee that it can make unsecured debt -- like medical debt -- simply go away. This could theoretically happen if a creditor accepts an offer made on your behalf by the debt settlement company. But no creditor is required to simply accept a settlement offer outside of bankruptcy, regardless of how reasonable the offer is. This means a reputable company should not be making these kinds of promises.

Another warning sign is that the company promises to stop creditor collection efforts and legal action. While this can happen if a consumer files for bankruptcy, without a bankruptcy filing there is no way to halt lawful collection efforts on the part of creditors.

There are other warning signs too. This post includes a brief summary of some of them. Debt relief attorneys are a good source of information regarding options for those looking to eliminate debt.

Source: Federal Trade Commission, "Settling Credit Card Debt," accessed Sept. 20, 2015

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