Debt Consolidation Scams Can Actually Keep Chicago Consumers in Debt
If you've got too many debts to keep track of, consolidating them into one big bill makes sense, right?
In theory, yes. Reality, however, is another story.
If you're like most folks, you've probably heard debt consolidation companies claim they can lend you money to pay off your debts at a lower interest rate. But what you're hearing is only half the story. That's because a debt relief company that wants your business isn't going to tell you the truth - that signing up for their services can actually leave you in more debt than before.
Debt consolidation firms typically advertise low interest rates, but here's what they won't tell you. If you've got too much debt, you probably won't qualify for those low rates. In fact, most of their customers have too much debt to qualify - if you didn't have too much debt, why would you be seeking their business in the first place?
Here's another thing they won't mention in those feel-good sales pitches - upfront fees for processing your loan application. And those fees can be thousands of dollars. Once they have your money, you have little to no power. So if your credit score was too low to qualify for the loan? Not their problem - they did their work, so they'll keep your fee. Or maybe they'll pull the old bait and switch - piling on last-minute charges or a new interest rate the day you're ready to sign an agreement, in hopes that you're so desperate you won't care. And of course, there's always the chance that they'll simply disappear with your money - it happens more frequently than you might think.
But the worst part is that debt consolidation merely sidesteps the real problem - that you've got too much debt because, for whatever reason, you're spending more than you can afford. Rather than take on a loan - and risk further damaging your credit score - you should be focusing on paying off your debt, plain and simple. Bankruptcy is one of the most effective ways to do it.
Unlike debt consolidation, bankruptcy is a proven way to lower or eliminate your debt while also protecting your assets. It's also your right as a U.S. citizen. When you try our free one-on-one debt analysis, a Chicago bankruptcy attorney can identify a bankruptcy plan that suits your unique financial situation - no loans, interest rates or upfront fees required.