Of all available options, if you are fortunate enough to qualify, debt settlement is perhaps the best available remedy for a great deal of reasons. As good as a choice as it is, there are many things that you should be aware of before making a committment to any debt settlement service. First and foremost, you should be sure that you have legal representation available to you throughout the process. That is to say, as long as you are in a debt settlement program, legal assistance should be available to you.
Debt settlement is a process in which an organization will go to your lenders and negotiate with them regarding your debt. The purpose of the whole exercise is to reduce your debt burden. If a settlement company is good it can get your debt reduced by as much as 50% although the average is 45%. This is what a creditor needs and this is the most visible benefit of debt settlement. The amount of the debt is reduced, the repayment plan is made easy and often the monthly installments are spread over a long period. This makes life a lot more easier for the borrower.
However, not all Debt Settlement Firms are created equal! Here are some things to be on the lookout for when shopping around for the best firm to deal with.
Upfront or Account Set-up Fees
Just about all debt settlement firms have a monthly service or processing fee. This is, afterall, the cost of doing business. However, an excessive fee generally indicates that you are dealing with a firm that has low expectations of the success of the clients they are servicing. In other words, their approach is to make their money from abusive monthly service fees and not from the long term benefits they should be providing their clients. A fee over $25.00 per month should be viewed as a red flag for any firm you may be speaking with about their service.
What Information Are You Being Asked For?
When you are first discussing your situation with a debt settlement firm, you should not have to supply any detailed information in order for them to evaluate your situation. Beware of any firm that asks for your Social Security number, credit card account numbers or any other vital information. Although there will come a time when you will need to provide this information, it is totally unnecessary at the beginning stages or in order for you to recieve a quote for the services rendered.
Who Is Calling Who?
One of the most common stories I’ve read on various blogs and forums about debt consolidation and debt settlement firms is that once a person has been enrolled in the program, they never can seem to get them on the phone again. The most common thought is perhaps they’ve gone out of business, and yet, your money still comes out of your account every month.
This is easy enough to avoid. If you find that every time you try to reach the company you’re thinking about working with, you are leaving a voice mail and getting a return call this could be cause for concern. Although the advisors at these firms do spend the better part of the day on the phone and leaving messages and getting return calls is a common practice, there should be at least a few times that you can reach the person you’re working with on the first attempt. Even if it’s only ONE time in the course of making your decision, that is enough to let you know that calls aren’t screened to avoid unhappy clients.