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Choosing consumer bankruptcy can protect against scams

Many Maryland consumers are struggling under heavy loads of debt. In an effort to regain financial stability, some sign on for debt relief services. While there are companies and organizations that provide legitimate debt relief options, a great many of these companies are little more than scams. It is important to understand that consumer bankruptcy offers a path out of overwhelming debt and carries little risk of being scammed out of one's hard-earned money.

Many experts believe that student loan debt relief programs are the fastest growing scams within the industry. As more and more people struggle to repay their loans, scammers are lining up to take advantage of that desperation. Some offer to help borrowers defer their student loan payments, for a fee, of course.

The problem with this approach is that simply deferring loan payments does nothing to reduce the total amount owed. Even worse, interest will continue to accrue while the payments are deferred, which will actually increase the balance due. Having to pay for these services also further weakens a client's financial standing, which creates an ever-worsening set of circumstances.

Consumers should know that there are federal programs available to assist in repaying student loans. These programs are free, and are available to virtually all borrowers. In addition, for those who have various other types of debt on top of student loans, consumer bankruptcy is an option that can lead to debt relief. While bankruptcy will not eliminate student loan debt, it can provide a much-needed degree of breathing room to allow Maryland borrowers to focus on their other obligations.

Source: Chicago Sun-Times, "Consumer debt still No. 1 source of complaints", Andy Grimm, March 7, 2016

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