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Miami Bankruptcy & Criminal Attorney / Blog / Bankruptcy / Beware of Predatory Schemes; Seek Serious Debt Relief Solutions

Beware of Predatory Schemes; Seek Serious Debt Relief Solutions

Anyone can land in debt, and it’s becoming easier to fall prey to financial ruin. Many Florida homeowners recently discovered that their mortgage insurance policies did not protect them after a foreclosure, resulting in worsened debt. Unfortunately, people seeking debt relief solutions often turn from one predatory system to another, and find that credit repair schemes can place them in even more financial danger. Avoid predatory relief schemes, and seek the assistance of an experienced bankruptcy attorney.

Predatory Lending, Mortgage Insurance Policies, and For-Profit Colleges

If you aren’t careful, and even if you are, there are predatory systems out there that target the already financially disadvantaged and lead to increased debt. Recently, national news has highlighted the plight of many Florida homeowners who foreclosed on their home, only to later receive huge bills from their mortgage insurance companies. Many homeowners do not scrutinize their mortgage insurance policies, which they pay premiums on for many years, trusting that the policies would prevent such injustice. However, in these homeowners’ cases, they discovered that the insurance policy protected only the bank, not the individual. As a result, insurance companies can come back and demand that homeowners pay the difference for homes that didn’t sell as well as hoped– even if that individual just lost their home.

Credit Repair Schemes Open to Widespread Abuse

As a result of predatory systems such as the mortgage policies highlighted above, already existing debt problems can be increased. When people try to solve those debt problems, however, they may encounter what seems to be a viable solution: credit repair firms. These firms promise to raise your credit score in exchange for a retainer fee, usually several hundred dollars. Ideally, the more established firms carefully dispute targeted expenses to ensure a credit report is accurate, which can boost a credit score. Even the best of these companies, however, can usually only do what the customer theoretically could have done themselves for free using the Federal Trade Commission’s own template dispute form.

Unfortunately, some credit repair firms are as predatory as the systems that engulf people in debt in the first place. Credit repair firms have doubled in number since the financial recession that left many families struggling to pay lenders on time and keep their credit scores healthy. Many of these new firms are small companies that operate only on the internet. The FTC receives around 2,000 complaints about these firms annually: for example, one firm was caught charging as much as $2,000, but in exchange, they were only disputing expenses they knew to be accurate. Some companies falsely claimed to have special connections with creditors or even the government itself. Notably, one Florida credit repair firm promised a high credit score in “as little as 30 days” –but provided no services at all.

Seek a Real Solution

Instead of clicking a pop-up for a credit repair site that promises a quick and easy solution to a complex issue, get serious about your debt relief issue and contact a Florida debt relief and bankruptcy attorney at the Law Office of Julia Kefalinos, Attorney, P.A.. Florida’s debt laws are actually favorable to debtors if you understand the system; for example, in many cases, debts can be settled or negotiated by an experienced attorney. Your attorney can take an in-depth look at your financial situation and help you understand what your options are. Beware of organizations with big promises; seek an experienced attorney who can advocate for you.

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