With the holiday season behind people, many Tennessee residents may be sitting down and realizing just how much was spend and how hard it hit their credit cards. People may even be dealing with debt they cannot afford to pay back. This is not an unusual situation. Many people struggle to pay their bills especially after major life changes including medical emergencies, job loss and divorce.

However, people in this situation can face extreme pressure from creditors to pay their bills. They may be subject to harassing phone calls and other abusive tactics. In many cases, people need some sort of debt management or debt relief from these creditors and from their overwhelming debt.

While many legitimate debt relief options exist, Tennessee residents should be careful and do their research before agreeing to any particular debt relief method. In particular, experts warn against debt relief scams which make false promises and charge extremely high fees. In fact, since September 2013 the Federal Trade Commission has fined debt-relief and mortgage-relief companies $13.5 million for violating rules and making false promises.

In many cases, these scam companies are offering debt settlement, debt relief or debt elimination. They often ask for money up front in exchange for negotiating lower payments with a creditor or for setting up a payment plan with a credit card company. However, experts warn many of the promises made are never fulfilled. The Federal Trade Commission and financial experts advise people to stay away from these sorts of companies. They also warn that some credit counseling companies can be out to make money off of those in need, even when they call themselves “non-profits.”

While these scam companies do exist, so do valid debt relief options. Legitimate credit counseling organization can help consumers create a budget and financial strategy to pay down debt and get financial freedom. Furthermore debt consolidation and filing for bankruptcy are other legitimate options that can help to bring peoples debts to more manageable levels.

Source: Chicago Tribune, “Beware debt relief scams,” Anya Kamenetz, Jan. 28, 2014