Avoiding Scams During Bankruptcy
You are in a delicate time in regards to your finances as you move through the process of bankruptcy. If you are considering bankruptcy or going through the process now, you may feel excited and relieved about having a fresh start with your finances and being able to get back on track after the bankruptcy is completed. However, there are unscrupulous companies and people who prey on those who are going through a bankruptcy and attempt to take advantage of them during this financially challenging time. Making sure you know what may be a scam can help you avoid falling into a trap set by those who would seek to cause you more financial harm.
How Do They Get Your Name?
Before we get into the types of scams people going through bankruptcy experience, it is important to understand how these companies get your name in the first place. Your name is available through public records for most any state court actions or bankruptcy proceedings. Additionally, your name can be sold by debt collectors to others for the purpose of preying on those having financial difficulties. These companies often provide “too good to be true” offers targeted specifically at debtors who are struggling to resolve their financial difficulties as quickly and easily as possible. As with anything in life, if something sounds too good to be true, it probably is.
If a lender sees that you have declared bankruptcy, shady lenders will offer loans with astronomical interest rates in order for you to get back up on your feet financially. However, these lenders also want you to use your home as collateral. If you sign on for these loans, you will receive a lump sum of cash, but it comes with the high price tag of unreasonable interest rates that quickly adds up if you fall behind, and the penalty of losing your home if you fail to make your payments. In many cases, these lenders will tell people that if they make their payments on time for a year, the rates will be reduced. However in many cases, this is simply not true. These lenders are betting on the fact that a debtor will fail to pay them back, and they will be able to foreclose on your home when that occurs.
Credit Repair Agencies
Again, when something sounds too good to be true, it probably is too good to be true. Many credit repair agencies promise that they can completely clean up your credit report or score for a fee. They promise to remove all late and missed payments from your report permanently. However, all these agencies do is simply contest every debt on your record, and hope that they will get lucky. You are more than able to do the exact same process yourself for free. In fact, many credit apps on your smartphone will allow you to make a one-click dispute button to challenge any debt on your credit report. You should never pay someone to do something you can do equally as well for free.
Let Us Help You Today
If you are considering bankruptcy, or are in the process of bankruptcy contact the West Palm Beach bankruptcy attorneys at Kelley Kaplan & Eller at 561-264-6850 for a consultation to help you understand the benefits of bankruptcy and how you can avoid any potential scams as you move through the bankruptcy process.