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MA residents may find debt relief offers to be worthless

Previous posts on this blog have warned Massachusetts residents to beware of certain companies that promise to help a person, who is often struggling to make ends meet, by eliminating their debt quickly. In fact, many of these companies may simply take that struggling person's money and give back nothing whatsoever, leaving that person in a worse financial situation than before.

A media outlet from another state recently warned its online readers about these scams again, noting that federal authorities have had to close more of these operations. Unfortunately, officials stopped these scams only after they had managed to siphon off millions of dollars from the already limited incomes of many honest Americans trying to get debt relief.

Although not every service that offers to help resolving outstanding balances and bills is illegitimate, Massachusetts should particularly watch out for companies that require an extended contract and a substantial upfront payment.

These agencies also may make promises that are too good to be true, implying that they have absolute sway over creditors when it comes to getting them to reduce a debtor's balance. In fact, a creditor has absolutely no obligation whatsoever to reduce a balance and may very well choose not to do so. In the meantime, the agency may keep its customer's fee without paying off creditors as promised.

Unlike these so-called "debt relief agencies", bankruptcy protection can, in effect, force most creditors to work with the person filing for bankruptcy. Generally speaking, a bankruptcy will prevent a creditor from collecting its debt by court discharge, and creditors that choose to ignore a discharge run the risk of substantial penalties.

Again, while not all or even most agencies that promote debt relief are illegitimate, many of them are. Massachusetts residents may therefore want to consider a bankruptcy as a viable alternative.

Source: KOMO News, "Tips how not to fall victim to debt relief offers," Connie Thompson, Sept. 13, 2013

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