You Should Always Ask These Questions Before You Select a Debt Settlement Organization
Questions you should ask a Debt Settlement Company
Does the Organization have an “A” rating with the Better Business Bureau?
Always check with the BBB the rating of a Debt Negotiation Organization before you select them. Don’t just take the company’s word for it. Contact the BBB and ask about the organization.
How Much Does the Assistance Cost and When is the Compensation Received?
Most Debt Settlement Businesses collect 15% to 20% of your total debt as compensation for their program. This payment is based on the amount of debt you have when you go into the service and is taken up front. With the company’s upfront payment coming out in the first 12 to 18 months, the majority of what you pay into their program is taken by them as compensation. Once they have taken their fee there is no motivation for them to do their job.
In a legitament Debt Reduction Service you only pay a small enrollment fee to go into the Program, so what you pay into the Program is actually saved and not eaten up in fees. The settlement fee is calculated on the amount forgiven by your creditors. This means the fee is calculated on the amount the organization saves you. The business should only receive a settlement fee once a settlement has been obtained. This will allow you to get out of debt much more rapidly and gives the business motivation to get you the best possible settlement!
Does the Debt Settlement Company offer Debt and Credit Counseling?
Most Debt Management Companies offer only debt settlement. A legitament Debt Assistance Company
will provide Credit and Debt counseling as well as Debt Consolidation and Debt Settlement Services. Your Credit Counselor should help you explore all your options so you can choose which service is right for your situation and budget. The company should not promote one program but should assist you in choosing the right service for you.
How Long has the Debt Management Organization Been in the Debt Management Business?
If it is a start up or brand new in the business, the organization will have very little experience. Always beware of a business that cannot provide proof of their experience.
Can the Debt Relief Organization Stop the Creditors From Telephoning Me?
No Debt Settlement Organization can guarantee they will stop all collection calls. That is simply not feasible. Anyone that claims they can is not being truthful.
Will The Debt Management Businesses be making monthly payments to the Collection Agencies?
The Collection Agencies are not paid until an acceptable settlement is negotiated and approved. Therefore, Debt Reduction Service Organizations do not make monthly payments to the credit card companies. That is simply how the program works. Any Debt Management Company informing you otherwise is not being truthful.
Can I get sued?
A credit card company can always sue you. If you are told something else, a red flag has just been raised. The debt assistance company is not being truthful.
Will This Ruin my Credit Report?
Inspite of what you may think or believe, all debt settlement programs will ruin your credit report. Think about it,you are in debt and are not paying as agreed. The debt settlement service is meant only as a management tool. However once your debt has been forgiven, your accounts will show a $0 balance and you will begin the process of reestablishing your credit report.
When Can I Expect My First Settlement?
While this can vary in every case, your first settlement should be made within the first 12 months from the beginning of your program. More than 12 months is not reasonable and the business that tells you this is more than likely not a good match for you.
Where is the Money Held While I’m Waiting on a Agreement?
This is a great question. Your money should always be kept at a third party escrow company that is FDIC insured. Any company telling you to hold your own money or to send the funds to them is more than likely not right for you. If you need to settle your debt, you must have the money ready to pay the creditors when the settlement is agreed to.
These questions are suggestions. The most important point is to ask many questions and get the answers to those questions. With your questions answered, you can find the Debt Relief Business Organization that is best able to help you.
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