Do you have a Real Estate question? Wondering about financing a property, personal finance, improving your credit , managing your debts, buying, selling, or real estate investment? Send your inquiry to The Mortgage Guru.

When you cannot manage your debt anymore, it makes sense to look for  assistance to companies who may help you solve their debt problems. But be very cautious because there are a lot of scams out there, most of which offer quick fixes and make promises that they can’t legally follow through on.

Fast Debt Relief

Many ads promise fast debt relief, but they are really promoting bankruptcy. Bankruptcy is one option to deal with financial problems, but it’s not the right option for everyone. Bankruptcy never look good, and it can have a long-term negative impact on your credit report.

Bankruptcy stays on your credit report for 10 years from the date you filed for bankruptcy, and can impact your ability to get credit, a job or even a place to live.

Credit Repair Scams

Like with the bankruptcy ads, ads for credit repair scams are everywhere on the Internet, newspapers, radio or TV. They promise to create a new identity for you, or take off judgments, bankruptcy, foreclosure even if the items are accurate. There is nothing, at all, that a credit repair agency can do for you that you can’t do for yourself, by directly disputing any inaccurate or outdated items on your credit report with the credit reporting agency. Furthermore, it is against the law to create a new identity for yourself or dispute an item which is accurate on your credit report. It is a federal crime to make false statements on a credit or loan application, to misrepresent your social security number, and to obtain an Employer Identification Number under false pretenses. In addition, you can be charged with mail or wire fraud if you use the mail, telephone or Internet to apply for credit using false information. Some companies may charge you up to $2,000 to 'fix your credit".

Advance-Fee Loan Scams

These scams target consumers who have credit problems, or no credit, and may have trouble getting a loan or credit card from a legitimate source. In exchange for a fee paid in advance, which can be as high as several hundred dollars, the company will “guarantee” that applicants get a loan or credit card. Many of these operations are illegal; while a legitimate lender may ask for a non-refundable application fee or an appraisal fee in advance, they will never guarantee in advance that you will get the credit or loan you’re applying for.

Protecting Yourself From Credit Repair Scams

Protect yourself from debt relief and credit repair scams by using common sense.

Check out any company with your local consumer protection agency or the Better Business Bureau before you do business with them. I highly suggest you to do business with someone local that will take the time to explain to you all your rights and that you feel comfortable with.

Never pay high upfront fees, never give your bank account information, credit card number or social security number over the telephone unless you are familiar with the company, have verified the identity of the company and individual calling, and you know why the information is necessary. Never pay a fee up-front to a company who promises to “guarantee” a loan or credit card to you.

Don’t do business with any agency that suggests you create a new identity, or that you do anything you think may be illegal. Not knowing that something is illegal will not protect you from being prosecuted for a crime.
Know your rights. Ask questions, and be skeptical of any company who is unwilling to tell you what your rights are. Never do business with a company that pressures you into signing a contract