Choosing The Right Debt Settlement Company

Posted on November 2, 2008
Filed Under Finance, Social-Issues | Leave a Comment

Well, you’ve probably heard it stated on several occasions: Consumer debt in the United States is spiraling out of control and families are finding endless struggles trying to stay financially afloat. Worse yet, Americans are losing their homes to foreclosure at alarming rates. So, what do you do if your credit card debt is becoming unaffordable, but you don’t want to lose your home?

Fortunately, you have options, and debt settlement seems to be growing in popularity as individuals across the country are facing these struggles and looking for ways to avoid foreclosure and bankruptcy filings. While many people choose to attempt to negotiate with their creditors on their own in an effort to reach settlement agreements, which will reduce the payoff amount of their credit cards, many more choose to hire a professional debt settlement firm to represent them.

With so much information available on the Internet regarding debt settlement and debt settlement companies, where do you begin when trying to determine which debt settlement company will best represent you? Below are some guidelines you’ll want to consider prior to making your final choice:

There are a few factors you’ll want to consider regarding the fees that will be assessed by a debt settlement company. First, you’ll want to determine if their fee for services rendered is paid “up front” or will you pay only after a settlement has been reached. It’s a good idea to look for those companies that do not take their fees up front to ensure that the best possible settlement is reached with your various creditors. Second, how much does the debt settlement firm you’re considering charge? Some debt settlement companies charge as much as 30% of your overall debt; that’s a significant amount of money. If you’re diligent you can find many debt settlement firms that charge only a percentage of the amount of money you actually save, rather than charging based on your overall debt. These firms typically charge approximately 15%-25% of the amount of money you save. Finally, you’ll want to only agree to terms which you can afford. You see, some debt settlement companies set you up with a trust account, to which you’re expected to deposit funds into each month. If you’re considering this type of arrangement you’ll want to be certain that you can afford what you’re signing up for. Also, these same companies are those who charge up front fees; again, steer clear of paying fees for services that are not yet received.

If you’re considering hiring a debt settlement company please check their Better Business Bureau rating. Even if the firm you’re considering isn’t a BBB member, they will still have some type of record if there have been any previous complaints filed. I would suggest, however, that you talk with only those companies who are members of the Better Business Bureau to ensure that you’ll do business with a reputable firm.

When you talk with representatives from debt settlement companies, be sure to ask about their customer service. How many clients do they service? If it’s a large number, will you be certain to always speak with the same person? How many clients does that particular representative service at one time? Will you receive regular updates, and how often? If you should happen to call and leave a voicemail how long will it be before your phone call is returned? These are all important questions that need to be addressed prior to choosing a debt settlement company. If you check the Better Business Bureau reports of many firms you’ll clearly see that the majority of complaints are based on customer service issues.

Remember, the bottom line is your peace of mind and what’s most important during your attempt to become debt-free is you, the consumer. Don’t be afraid to ask the questions I’ve outlined, and don’t stop your search until you’ve found a company that you feel you can trust.

Marie Megge is a consultant in the credit services industry. Over the past several years she has assisted many individuals in resolving their debt-related matters. For more information regarding credit and debt visit http://www.donaldsonwilliams.com

Related Posts

Comments

Leave a Reply