In recent years, we have seen a dramatic rise in scams involving bankruptcy and debt collection. With more personal information available online, many of these scammers can be quite convincing. Worse, it is not unusual for scammers to impersonate lawyers, courts, attorneys, and government officials. Here are some of the more common scams and ways to protect yourself from them.
In this scam, fraudsters attempt to collect on a debt that either doesn't exist, has been paid off, or is beyond the Statute of Limitations. They often employ aggressive tactics, threatening legal action or severe consequences if you do not pay immediately.
Quick Note: Never pay anyone who demands that you pay with prepaid cards, cash, or some other unusual form of payment. A legitimate debt collector would not ask for payment in such a manner.
Many companies might promise to reduce or eliminate your debts but instead enroll you in a service that does little to address your financial troubles. Often, you end up paying huge fees for poor results while your credit rating is trashed.
Quick Note: In our Greater Philadelphia debt and bankruptcy practice, we have seen many individuals who scammers have approached. Unfortunately, people pay the scammer before calling an attorney, and then it may be late.
These scams claim to help eliminate your debt, often using dubious legal theories. Victims are typically convinced to pay hefty fees for documents purporting to absolve them of their debts, but these documents have no basis in law.
Recently, scammers have contacted discharged debtors, claiming that certain debts were not discharged in the debtor's bankruptcy. Sometimes, they impersonate the debtor's attorney, the court, or the bankruptcy trustee and ask the client to send money to pay for a non-discharged debt.
These scammers target people with debt issues, promising to repair their credit. The scammers claim to boost your credit score quickly but often use illegal tactics or make false promises. By and large, "credit repair" companies ignore the reality that it takes time to improve your credit.
The best defense against bankruptcy and debt collection scams is knowledge and skepticism. Always be cautious when someone offers a too-good-to-be-true solution to your financial woes. It's essential to do your research, seek advice from an attorney, and trust your instincts.