Debt Relief or Bankruptcy Scams

  • Be suspicious of ads that promise quick fixes.  Retiring debt with limited income is not quick or easy, and you should be wary of advertisers who say it is.
  • Avoid any company that tells you to stop communicating with your creditors.
  • Approach bankruptcy with caution.  Bankruptcy is a legitimate way to obtain relief from financial troubles, but the Federal Trade Commission warns that it should be treated as the “option of last resort.”  Bankruptcy can have a negative and long-lasting effect on your credit.
  • Know that you don’t have to hire someone to “consolidate bills” or provide credit services.  Instead, you should first try to speak with your creditors and see if you can work out a payment plan.
  • Don’t call predators who make promises of lower bills but deliver high fees for up-front money.  Instead, call the Consumer Financial Protection Bureau’s toll-free helpline at (855) 411-CFPB (2372).  They can take your complaint or help you find a HUD-approved housing counselor.
  • Seek help right away if you’re behind on your mortgage.  Contact your servicer to see if you qualify for the Home Affordable Modification Program (HAMP), Home Affordable Foreclosure Alternatives (HAFA), or other mortgage modification options.  Have your mortgage statement and pay records available.  If you have further questions about the modification programs that your servicer can’t answer or you need to speak with a free HUD-certified housing counselor, call the Homeowner’s HOPE Hotline at 888-995-HOPE.