Be wary of 'new' debt relief programs

Invoice with past-due notices and money

Could the phrase "debt restructuring" become the new buzzword in debt relief?

The term is thrown around frequently when talking about companies or even countries. Think Greece.

It's not nearly as common to hear the phrase as it relates to personal finance. You're more likely to hear the tried-and-true phrases -- credit counseling, debt settlement and debt consolidation.

But that could change.

In debt restructuring, investors would buy your delinquent debt and settle with your creditors for less than what you owe.

You'd pay the investors something above what they settled for but less than what you owe. These loans can be paid back over time.

When debt settlement companies first sprang up as a result of the recession, millions of consumers found themselves inundated with savvy marketing and advertisement strategies.

It wasn't until thousands of those consumers became clients and subsequently lost their money that a problem was discovered in the then-new debt relief service.

Indeed, debt relief scams are pervasive.

If you're seeking help with debt, you should be on guard against providers promising to make debt problems disappear -- no matter what it's called.

Whenever you seek help from a debt relief service, you should proceed with caution before committing. This is especially true when considering a new process or provider.

Your first step should be to check the company's record with the Better Business Bureau. Look specifically for the length of time the company has been in business, the number and type of complaints, how the company handled complaints and any other names the company may be operating under.

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