If you’re facing bankruptcy, it’s important to be aware of bankruptcy-related scams and how to protect yourself. When a person is facing financial crisis, it’s common to seek any and every possible avenue for getting back on their feet. Unfortunately, there are unscrupulous individuals who capitalize on the financial misfortune of others and take advantage of their hardship.
Types of Bankruptcy Scams
Credit counseling scams promise to help you get your debts paid down so you can avoid going bankrupt. While there are legitimate credit counseling services out there – some of which might be a great option when facing a debt crisis – these honest organizations are upfront with fees for services and don’t make outlandish promises of turning your financial life around. Compare fees with other services, and if you’re constantly being sold products instead of offered real advice, go elsewhere.
There are scamming companies that, instead of telling you they’ll help you avoid going bankrupt, tell you that they’ll help make the bankruptcy process easier. These companies say they will help you obtain credit reports, find a bankruptcy lawyer or file paperwork. It sounds great, except generally, you can get your credit report at no cost and find an attorney for free. Filing paperwork for bankruptcy should be done by a legal professional. Many sketchy companies charge hefty fees and may make mistakes that could damage your bankruptcy case.
In some cases, a scammer will offer to help stop foreclosure, telling the homeowner to pay mortgage payments to the scammer instead of the bank. Some will have the homeowner sign over the deed to the house. These scammers will often take the money without even contacting the bank or lending company. Mortgage payments are to always be paid to the bank. Being told otherwise is a major red flag. Be wary if you’re asked to pay a fee before receiving any service, if you’re asked to make payments, or sign over a deed to an individual or company.
Consult an Attorney with Questions about the Bankruptcy Process & Its Consequences
A lawyer can answer any questions you may have when facing or considering bankruptcy. Discussing your options with an attorney first will provide a clear picture of exactly what lies ahead for you. Be informed regarding all your options, which may help you better evaluate offers for credit counseling or other services. Don’t be a victim to bankruptcy scams.