With student loan debt being a primary concern for a record number of graduates, the debt settlement industry is seeing a green light for making more money. If you are seeing offers such as “all of your student loan debt can be eliminated or forgiven,” it is likely a scam.
A debt settlement company will guarantee that they can obtain a lower monthly loan payment for you, but only if you pay their costly fee upfront. Even worse, they may further entice borrowers by claiming to be affiliated with federal loan relief programs. Sadly, nothing is guaranteed and many borrowers pay the hefty fee for services that are never provided.
The Federal Trade Commission (FTC) reports that an overwhelming number of borrowers across the country are filing complaints about debt collection and debt settlement companies. In fact, the FTC has filed lawsuits against numerous agencies for fraudulent credit-related services that cost consumers hundreds to thousands of dollars.
How did we get into this situation? It started with the mortgage crisis when thousands of homeowners owed more on their mortgage loan than their house was worth. Debt settlement companies began popping up everywhere with promises to help avoid foreclosure and refinance mortgage loans with better terms. In reality, the homeowner would send the mortgage payment to the debt settlement agent, who would never actually forward it on to the mortgage lender. The theory was that by withholding payment, the lender would eventually agree to settle for less, but this rarely happened. As a result, many homeowners were left with staggering debt and damaged credit scores.
Now these same debt resolution companies are positioning themselves to take advantage of student loan borrowers. Don’t get caught in this scam. If you need assistance dealing with your student loans, let a trustworthy student loan attorney help you.
Please keep in mind that every matter is different. If you have questions about your student loan debt and you would like to schedule a no-cost consultation to discuss your options, please contact our office by completing the form on this website or calling us at (954) 932-5377.