When you realize you can no longer manage your

debt

on your own, turning to a professional

debt management

company seems like a reasonable way out of

debt

. However, as sad as it seems, there is a certain possibility you may get caught up by a fraudulent company and find yourself in a deeper financial hole in the end. So, here are some basic things you should check our before having any business with

debt consolidators

,

debt management companies

, etc.

First, check the

debt management

company with the state Attorney General, consumer protection agency, and the Better Business Bureau. You have a full right to know if there are any consumer complaints filed against the

debt consolidation

company you are intending to have business with. Attorney General can provide you with the information about the licensing requirement for the company in question, because some states strictly regulate the legitimate basis of the

debt management

activities.

Some

debt management

companies charge rather high fees and do not fulfill their claimed obligations. Other

debt consolidators

may misrepresent the terms and conditions of a

debt consolidation loan

, avoiding the important information about some costs and fees, or worse – that you are signing your home as collateral. Some companies advertise voluntary debt reorganization plans, without mentioning that you’d be actually filing for bankruptcy with all possible dire consequences.

There are also some

debt management

companies that guarantee you a

debt consolidation loan

in case you pay them a certain fee in advance. However, this is illegal. So, do not jump into any of these, no matter how high or low the fee may seem. Yes, many legitimate creditors OFFER loans if you pay an application fee, or appraisal fee in advance. However, they have no right to GUARANTEE a loan, or demand and accept the fee before you’ve been approved for the loan.

Another area where you can get defrauded is the so-called credit repair clinics. These businesses offer to clean up the poor credit reports for a certain fee. However, they most likely misrepresent the nature of their services. In the first place, you have the right to correct the inaccurate information on your credit report without any third party. In the second place, despite the claims no credit repair clinic can remove the accurate information from your credit report. Only the long-lasting and hard process of repaying the

debt

can mend your credit score.

If you’re considering getting help to improve your financial situation, do some substantial homework first. Check out what services a

debt management

company provides and what are the fees, and don’t rely on verbal promises. You must have everything in writing, and read your contracts carefully, especially the points in the fine print.