If you’ve decided your best course of action is to pursue debt settlement, you’re going to need to know how to pick a debt relief partner. Given this is a company with which you’ll be dealing for at least two years—possibly longer—you’ll want to choose carefully.
After all, your financial future is on the line here, so you must make sure things are handled properly and as expeditiously as possible.
Looking for a business with the following attributes will help you find a competent organization with a reputation for acting in its clients’ best interests.
How to Pick a Debt Relief Partner
You want a highly rated group through the Better Business Bureau, that’s been in business for at least 10 years with few or no complaints on its record.
The more experienced the company, the better its chances of negotiating a favorable resolution of your debt. The nature of the industry means some complaints will be lodged against companies from time to time.
Before rushing to judgment, if everything else lines up, review complaints to determine if they are justified.
Organizations like the American Fair Credit Council ensure debt settlement companies adhere to the guidelines established by the Fair-Trade Commission (FTC).
An organization must operate in full compliance with the regulatory initiatives of the FTC as they apply to the debt settlement industry to be a member.
Similarly, the International Association of Professional Debt Arbitrators provides the consumer debt relief industry with training and certification programs.
Affiliations with organizations such as these usually mean a company is on the up and up.
Costs, Fees, Charges
Debt relief companies are for-profit entities and they do have fees. The questions are: how much are those fees, when are they applied and when are you expected to pay?
Reputable debt settlement companies will only bill a client when a debt is settled. However, before signing with any company, consult your budget to make sure you can afford to work within its prescribed program.
You’ll make monthly payments into a fund established to settle your debts.
This is the one time in your life as a consumer when you’re better off dealing with a company that offers no guarantees.
The fact of the matter is no debt settlement company can guarantee every creditor will agree to accept their proposals on your behalf.
Misunderstandings about how debt settlement works have led to a number of issues like the so-called Freedom Debt Relief scam.
It’s not that companies like FDR are unethical, but rather that some folks misunderstood advice for guarantees.
With that said, if the company you choose proves unable to settle one (or more) of your accounts, you should not be expected to pay the fee for that debt.
Keep in mind; debt settlement will have an adverse effect on your credit score until more positive news starts to accrue about your accounts. It might seem counterproductive, but in reality, it’s a smart step in the right direction.
Considered by many to be the nuclear option of debt resolution, most reputable settlement companies do not offer assistance in this regard.
Filing for bankruptcy protection is the province of legal professionals. You’re much better off with a bankruptcy attorney when your situation demands this method.
If a debt settlement company is offering this service, it is likely a subsidiary of a law firm whose real specialty is bankruptcy.
Following the above guidelines for how to pick a debt relief partner will land you in good hands. Patience is the watchword when you find yourself in these circumstances.
Hasty decisions can make your problem worse. Take your time and find the right fit.