How to Choose a Debt Settlement Company

Many consumers who are facing outstanding debt obligations have researched a number of credit card debt settlement companies as well as any appealing credit card debt help alternatives that may be able to solve their financial problems. One problem that consumers frequently encounter is the fact that many of these credit card debt organizations all appear to be offering the same credit card debt assistance. They come across similar monthly payments, program lengths, and potential results from many of these debt settlement companies. This article attempts to inform the consumer how to properly approach the process of choosing the best credit card debt settlement company. There are a number of factors to consider before you reach a decision as to what the best fit for you may be. Throughout your debt help research, ask yourself these questions to help the process along and reach the right decision as fast as possible:

1) Do they properly qualify their clients?

Debt settlement companies that practice business ethically should only want to enroll consumers into their programs who they know they will be successful in servicing. The company should collect information regarding your credit card accounts as well as any personal reasons you may have fallen into debt to your creditors. This information should be passed through an underwriter who determines if you are a good candidate for the debt settlement program or not. A debt settlement organization who does not employ underwriters qualifies any consumer for the benefit of their own business; these companies should be avoided at all costs as it is inevitable that they will not provide the level of relief as they are promising.

2) What are the costs of the program?

First, assess both the monthly payment the settlement company is offering as well as the overall cost of the program. If the monthly payment is the same or just under the minimums you are currently paying to your creditors, you aren’t receiving the benefits of an effective debt settlement program. Secondly, if the overall cost of the program prevents you from saving a sufficient amount of money, the company is most likely not as skilled in negotiating as others working for debt consolidation companies. And finally, make sure you know what the company’s fees are. Anything over 15% of your total debt is considered above the industry average, and anything around 10-13% of your total debt should demonstrate that the company is desperate for clients and most likely not that successful in the credit card debt settlement industry.

3) How long will I be enrolled in the program?

If a debt settlement company insists that staying in the program over 3 years is beneficial for reaching settlements they are providing you with completely inaccurate information. Typically, a settlement program lasts between 2.5-3 years depending on how much a client can afford for a monthly payment. If a company tries to convince you that a 3.5 year program will save you more money, they are giving you bad debt help advice and it is likely that their negotiators are inexperienced and ineffective.

4) How much money is the debt settlement company claiming they can save me?

The majority of settlement companies profess that they have the ability to save you 40-60% of the total debt you owe. In some cases, reaching a 40% settlement is not unrealistic. However, you must understand that the amount of money that you can save through a settlement program depends heavily on who you creditors are. In the credit card industry, it is a fact that there exist a number of creditors who are very reluctant to reach low settlements. The more difficult creditors typically refuse to settle for anything less than 60-70% of your total debt. If a settlement company tells you they can save you 60% of the total debt that you owe, they are painting an unrealistic, best case scenario picture in which they settle every one of your accounts for 40% of the owed amount. Be sure that every company you consult is giving you a realistic portrayal of your situation once they know what creditors you are in debt with.

5) Is this debt settlement company a member of the BBB or TASC?

Make sure that before you choose to go with a debt settlement company that they are members of the Better Business Bureau (BBB). You can go online to find out if they are in fact a member as well as view any complaints the company has received through the bureau. In addition, you ultimately want to know if they are also members of the Trade Association of Settlement Companies (TASC). This association sets industry standards for debt settlement organizations that are practicing business. If they are not members of either, it is likely that the company practices unethically and perhaps fraudulently in the debt settlement industry. Being a member of both the BBB and TASC demonstrate that the companies are practicing business under proper conduct and are following industry standards successfully.