How to Spot a Debt Relief Scam [2025 Update]

Holding debt isn’t a problem if you’re able to pay it down. But if you find yourself swamped and stuck in a cycle that doesn’t let you pay off your debts, you could quickly become desperate to regain control. At that point it could be tempting to listen to any debt relief promise you hear. 

Even if you tend to be wary of deals that sound too good to be true, when you’re in serious trouble, it’s just human nature to grasp at any shred of hope. Debt relief scam artists know this and find no shame in targeting folks already at their wits’ end. The Ohio bankruptcy lawyers at Hausen Law are here to help you to step back and double check those grandiose promises. We’ll also offer another, better option to give you the debt relief you’re looking for.

Debt Relief Warning Signs

The government has put out plenty of warnings to help consumers protect themselves against fraudsters, but when you’re dealing with suffocating debt, it’s easy to fall prey. Regardless of what scammers say or how good the promises sound, the outcome will always land you in a worse spot. Here are some tried-and-true signs to look out for that will help you to spot a debt relief scam before you become a victim. 

• Scammers Contact You First: Robocalls and prerecorded messages are often used to reach out to potential victims. If you receive a call out of the blue in which the caller claims to be able to erase your debt, ignore their promises and hang up.
• Fraudsters Ask for a Large Upfront Fee: Scammers will typically charge an upfront "service fee” or "representation fee" accompanied by outlandish promises. They will then either take the money and run, or help with a small fraction of your total debt that ends up being less than the fees and extra interest they charge. They always make out in the end. This is illegal behavior and the quickest way to spot debt relief fraud.
• There’s No Valid Written Contract: There are some legit debt relief companies out there, and they will always disclose terms and conditions in writing. Fraudsters will either refuse to explain fees and terms of what they’re offering or do so verbally––you typically won’t see a written contract. That said, even if a scammer does provide a contract, that doesn’t guarantee that they are trustworthy. Consulting with a seasoned Ohio bankruptcy lawyer is your best bet to avoid an outright scam.
• Pressuring or Scare Tactics: Because you aren’t provided with a clear contract that lays out responsibilities, the scammer is at liberty to apply pressure for payment of fees. If they are threatening jail time, this is a clear sign that they are just looking to collect money quickly, using fear to prey on an already vulnerable individual.
• Exaggerated Promises: Fraudsters will make big promises, such as being able to reduce debt by as much as 80%. Unfortunately this is just a tactic they employ, in hopes that potential targets can be lured in and convinced to hire their services. They know the desperation that can accompany debt and have no qualms about exploiting it. In the end, no debt relief company or scammer can force creditors to do anything, let alone slash what you owe them. Any promise they make on this score is a lie.
• They Ask You To Stop Communicating With Your Creditor(s): Open communication with your creditors is key when you’re looking to consolidate debt or avoid monthly fees and penalties. Cutting ties can instead result in a worst-case scenario of a creditor trying to sue you. In fact, contacting creditors directly can be the first step in learning about legitimate debt relief options. They may also be able to warn you against predatory companies.

After you’ve paid an upfront fee and severed ties with your creditors, a scammer has you right where they want you: isolated and dependent on their questionable services. Unfortunately, these swindlers aren’t going to be able to help you recover from debt and will actually make the matter worse. 

To avoid falling victim to a debt relief scam, it’s vital to be well-informed. You can spend time researching an organization that you’re considering working with, but it could be time that you can’t afford. Another option is to consult with a federally recognized, nonprofit debt relief organization. They could present some reliable options and let you know what is and isn’t possible, given your situation. And for the best legal advice surrounding debt, consulting an Ohio bankruptcy attorney is a great idea and a way to learn about potential legal recourse. 

There’s no reason that you should fall prey to someone who’s trying to capitalize on your debt.

How to Get Out of Debt in Ohio

Debt consolidation, debt settlement, and bankruptcy are the three major debt relief options available to borrowers. For most, filing for bankruptcy is the only valid way to get out from under excessive debt and chapter 7 bankruptcy is typically the best option for debtholders. If your debt is over the mandated limit and your situation fits certain criteria, you might also investigate a chapter 11 bankruptcy. 

The main purpose of this legal form of debt relief is to give you a fresh start. Yes, your credit score will suffer initially, but that’s a small temporary price to pay. You’ll ultimately have peace of mind, knowing that monthly bills will be paid and that you’re on the road to financial recovery.

Knowing the signs and confronting any would-be scammer with your doubts and suspicions will often turn them away. They’re looking for an easy steal, not a hard-won prize. If they think you’re onto them they’ll just find the next unsuspecting debtor who’s overwhelmed and underinformed.

Use Trusted Credit Repair and Credit Counseling Programs

On top of dealing with the short-term crunch of excess debt, folks often worry about long-term damage to their credit score and how it might impact their future. Or perhaps you’ve already made it through debt repayment, but are now staring down a resulting low credit score. As with doubtful promises about debt relief, scams that guarantee a quick credit report cleanup often require an exorbitant upfront fee without offering any real help.

If a company reaches out to you, be wary! Reputable companies will never contact you first. The fact that a company knows who you are and that you’re in financial trouble should be an immediate red flag. They’ve clearly paid for your data and are looking to make that cash back. If the representative also requests fees before providing services, doesn’t address your legal rights, or indicates that you should avoid credit bureaus and falsify or dispute valid information on a credit report, you can be sure they’re up to no good. Remember too that grandiose promises of a fast credit cleanup are fundamentally impossible––recovery takes time.

In most cases, filing bankruptcy is a far better choice than seeking credit counseling alone. As part of the bankruptcy process you will be required to take instructional courses to help you better manage your finances. And a chapter 7 bankruptcy gives you the opportunity to work with creditors to find an amicable solution forward while also guaranteeing that your rights are protected. 

At Hausen Law we are happy to offer both a credit counseling program that is taken prior to filing for bankruptcy, and a credit repair course that can help you to rebuild your credit following your bankruptcy.

Work With an Experienced Ohio Bankruptcy Lawyer

No matter your bankruptcy questions, our experienced chapter 7 bankruptcy lawyers have solid answers. Find out how chapter 7 bankruptcy could help you get out from under crushing debt and get back on track financially. And when you’re looking to clear debt and start over, don’t fall for scammers’ claims––call on our bankruptcy attorneys instead! 

For help with all things bankruptcy in Ohio, contact our Northeast Ohio Bankruptcy Attorneys–we’re here for you. Hausen Law is happy to serve all of Northeast Ohio, including the Akron, Canton, Cleveland, Wooster, Dover/New Philadelphia, and Youngstown communities. Contact us today to set up a free consultation or to inquire about our credit counseling and credit repair programs.