Debt Settlement Companies
As consumer debt continues to spiral out of control, debt relief is fast becoming a major concern for many American’s. In 1999, American’s made $1.1 Trillion worth of credit card purchases. In 2001, American credit card debt hovered around $690 billion. Unfortunately, in today’s unstable economic conditions, many American’s are being forced to turn to credit cards as a way to extend their income. Consumer debt is at an all-time high and American’s need to know what they can do to get out of debt. Often, consumers are seeking the services of professional debt settlement companies to help regain control of their finances. However, prior to making such an important decision, it is important to fully understand who you are doing business with.
Debt settlement companies charge hundreds of dollars as an initial “admin fee” to set up your account, plus a monthly service fee. The fees vary depending on the company and the amount of your debts.
Such companies take your money every month, but don’t make monthly payments to your creditors! Instead, they put it in a trust account, negotiate your debts with your creditors, then make a lump-sum payment when there’s enough in your account to pay a creditor in full.
Debt Settlement companies accomplish this task on the basis of communication and negotiation. When the customer decides about going for liability reduction then it contacts a relief firm for this purpose. The customer explains all the parameters in relation to the payments that have already been made. The relief firm analyzes these provided details and then starts a proper communication with the bank.
One of the first places to check the names you’ve gotten is with the Better Business Bureau. They have a website that will let you search any company name. Checking out your list of names isn’t hard and it will give you their rating. It will also inform you if there were complaints against that company and if they were resolved or not.
If you have too many uncertainties, settling debts on your own is definitely not the right step for you. Without sufficient knowledge, you may not know what amount to be proposed to your creditors. You also don’t know exactly what the impact is on your credit score if you go for debt settlement blindly.
You could also check on others opinion on how did the company actually help them in debt settlement. Do they need to incur most cost or how long it take for them to be in debt relief? Will you be giving the same services as the others received? From their feedback, you could at least analyze if that company actually is reliable in helping you.
When looking into the best debt settlement companies make sure you review there accreditations. The debt relief industry is like any other and they are required by law to be compliant in what they say as well as how they work. I recommend that you DO NOT work with any debt relief company who is not members of at least one of the following: United State Organization of Bankruptcy Alternatives aka “USBOA”, the National Association of Debt Relief Companies aka “NADRC”, or finally The Association of Settlement companies know as “TASC”.
If you are over $10,000 in unsecured debt it would be wise to utilize a debt relief network instead of going directly to a debt settlement company. Using a debt relief network guarantees that the debt settlement company you choose has been certified and has established success in negotiating settlements. They are free to use and a good starting point to begin your debt relief process.