There are many illegitimate, fly-by-night operators in the debt management services industry. Their sole aim is to separate you from your hard earned money. They can be slick talkers, and sometimes it’s very difficult to know whether or not their services are for real.

Since you may have a significant amount of debt to repay, they take advantage of your vulnerability and make promise to help that they cannot deliver. In reality, though, they are working only for themselves.

If you are facing an intense financial need, what do you need to know to avoid becoming the next scam victim of one of these con artists?

Legitimate Companies

Legitimate debt counseling companies offer a necessary service in managing and helping to reduce your debt. They are able to provide the following services.

* Assist with consolidating high interest loans.
* Manage your debt accounts.
* Stop late fees for many payments, or at least reduce the amounts on those fees.
* Help you determine methods of restricting your use of credit cards for essential expenditures, such as unplanned travel and emergencies.
* Often - but certainly not always - provide a local program that enables you to meet face-to-face

Though the principal payments will not be lowered, the interest on the balance of outstanding loans can be reduced to a degree. These companies, such as Consumer Credit Counseling Service (CCCS) and other similar ones, help to negotiate interest payment reductions on any outstanding balances.

Many times, however, you can negotiate restructured debt payments with your creditors on your own. They are more than willing to work with you. They, after all, have high incentive to receive back from you as much of the loan as possible.

Typically take the initiative to contact you and ensure critical information is made available to you in a timely manner.

The Phonies

*Will not be able to offer any substantiated testimonials from their customers.
* Won’t have an expert panel.
* Won’t be able to describe realistic strategies or procedures for truly managing and reducing your loan amounts.
* Request your money to pay off creditors, but do not actually follow through.

Scam Company - AmeriDebt

One such company which has now been closed by the Federal Trade Commission is AmeriDebt. After the Commission received several complaints against them, the company was unceremoniously shut down. AmeriDebt had scammed their clients by telling them that they could reduce their debts without any upfront fees.

However they conned their customers into offering "donations" to the company. Instead of paying back the money to the creditors, AmeriDebt transferred it to other profitable companies. As a result, their customers ended up suffering even worse credit ratings than prior, and creditors made their lives miserable.

Be extremely careful with any company with whom you have financial dealings.