When you approach a debt consolidation or debt management company, chances are good you are on the verge of a financial disaster, that is if it hasn’t already happened. With the industry growing fast, the debt consolidation companies are coming out of the woodwork and advertisements are everywhere. It may be very overwhelming for people to know who to choose and what warning signs they should be looking for when approaching a company for help.

While there are many companies in operation, not all of them are legitimate and selecting the wrong one can cause serious financial damage to your family. Err on the side of caution and pay attention to the following warning signs.

Upfront Demand for Account Information Plus High Fees

Companies that ask fro account information, personal information, and other secure information before giving you a quote may be setting you up as a prime candidate for identity theft. If you willing provide them with your confidential information without signing a legitimate contract and having a monthly payment quote, you are setting yourself up for severe financial disaster.

All-Inclusive Debt Plans

If a company requires that all of your debts be enrolled in a program to qualify, be warned. The company most likely is thinking of themselves and the higher fee they can take from you. There are many debts that can not be negotiated, such as student loans. When the consolidation company insists you list all of your debt for their program, politely decline and seek other assistance.

Monthly Payments Are Quoted Low

While it may sound like heaven to hear that you only have to pay a really low amount of money each month to pay off your debt, the reality is that the initial quote is just an enticement to get you to commit. After the enrollment in the program is complete, the company will most likely raise the monthly payment amount considerably. Creditors already have their lowest rates that have been determined and all dent consolidation companies are given the same rates. No one company can get better rates than another. Make it a priority to find out about the companies fees before considering the amount of monthly payments you will have to make.

Added Extras For More Cash

Companies will often offer the perception that they are a one-stop-shop for all of your debt consolidation needs. In many cases, the “extra services” provided are just a reason to add more money to your monthly tab. Some of these services may include credit repair and continued debt counseling.

Not all companies offering debt settlement or consolidation services are a scam. In fact, many are very good at what they do and can actually decrease your debt in an unbelievably short period of time, provided you make your payments on time and work hard to maintain a debt-free life. Do your research before selecting a company and visit the US Department of Justice for more information about debt consolidation agencies.