If you are facing the pressure of mounting bills, creditors calling your home all day, and compounding interest payments pulling you more and more underwater, looking into the bankruptcy facts might be your best option, but beware bankruptcy scams!
Filing for bankruptcy can be a tricky process, and seeking the help of a bankruptcy expert is not a bad idea. Still, know that some unscrupulous companies will try to take advantage of your financial stress. Knowing what to look for will help you avoid these bankruptcy scams.
Some dishonest companies target people who are undergoing a bankruptcy. But instead of offering legitimate services, these bankruptcy scams profit from the desperation of people in the throes of financial crisis. These companies usually advertise on the Internet, in the newspaper, or directly contact people whose bankruptcies are indicated by public-record notices.
Some companies may charge you for services that you can do yourself. For example, these companies may charge you for pulling your credit report or finding a lawyer, two things you can do on your own, and probably for free. Other companies may offer to file a bankruptcy petition on your behalf. While there are some legitimate bankruptcy petition preparation businesses, many have a reputation for doing shoddy work and submitting petitions filled with errors. As a result, some judges may dismiss your petition outright, making an appeal difficult.
Even worse, many disreputable companies might make unlikely promises. For example, some will promise to remove your bankruptcy by working out a compromise with your creditors. You pay them a chunk of cash, which they promise to distribute to your creditors. When and whether they pay those bills is up for question. And more importantly, no one can remove a bankruptcy from your record!
The number one sign of bankruptcy scams is when the offer sounds too good to be true. There is no magic cure for bankruptcy. If the company is over-promising by saying they can make your bankruptcy disappear, they are not disclosing the full truth.
Also beware of any company that takes your money without informing you of your rights. These might be fly-by-the night bankruptcy scams who will disappear with your cash in their pockets. Call around and ask for referrals from bankruptcy attorneys and industry experts before settling on a bankruptcy company. You will likely have much more luck if you do the research rather than waiting for the company to find you.