What To Look For In A Debt Settlement Company

If you decide that it’s time to take control of your debt, and want to avoid going to bankruptcy court, a debt settlement company may be just what you need. However, be aware that certain individuals who run such companies are unethical and dishonest, while others are inefficient and incapable of doing the job properly.

What you can expect

If you decide that you want to work with a debt settlement company, rather than lowering your interest, they will try to have your creditors lower the balance that you owe, such as reducing it from $11,000 to $6,000, which would be more manageable. When this is done, that amount can be paid off all at once or via an installment plan.

What you should know

There are many reasons why people decide to contact a debt settlement company. For example, a nonprofit credit counseling service can only do so much in regard to lowering the interest rates on what you owe, and those monthly payments could still be too high you to handle, which means that paying off your debts will still seem like Don Quixote’s “impossible dream.”

Since the size of your debt is at least fairly substantial, what you can expect from a reputable debt settlement company will vary widely. With this in mind, it is essential for you to thoroughly investigate a company prior to working with them. If you fail to take that step and make a hasty decision, you may also make the mistake of using a company that will end up causing a serious situation to become even worse than it was before.

Finding the right company

Before you sign a formal agreement, watch for two telltale signs from a debt settlement company. To begin, the upfront fee should be reasonable, meaning $75 or less if you choose a nonprofit debt settlement company, and a for-profit organization isn’t permitted to charge this fee.

Note that the debt settlement company you want and need will spend time doing an assessment to determine whether you should file for bankruptcy, see a credit counselor or continue making payments on your own. In addition, your first meeting with a debt settlement company’s representative should last at least an hour, and they should give you their full attention if you want to be taken seriously.

If a debt settlement company attempts to pressure you into adopting their plan or creates the impression that this is a very simple procedure and a cure-all for your financial problems, that is the time when you will want to head for the nearest exit.

As part of your due diligence, Google a company that interests you, find out when they were established and study any complaints or comments that have been made about them. Check them out with the Better Business Bureau. This will give you a general ideal of what you will be getting into, and once you have narrowed the field down to one or two prospects, you can contact the attorney general’s office in your state for more information.