Be Sure to Ask These Questions Before You Employ a Debt Settlement Business

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Questions you should ask a Debt Management Business

Does the Business have an "A" rating with the Better Business Bureau?

Always confirm with the BBB the rating of a Debt Reduction Business before you Hire them. Don't just take the company's word for it. Call the BBB and inquire about the company.

How Much Does the Program Cost and When are the Fees Collected?

Most Debt Settlement Organizations charge 15% to 20% of your total debt as compensation for their service. This payment is based on the amount of debt you have when you enter the service and is taken up front. With the organization's upfront fee coming out in the first 12 to 18 months, the bulk of what you pay into their program is taken by them as fees. Once they have collected their fee there is no motivation for them to do their job.

In a legitament Debt Assistance Plan you only pay a small enrollment fee to go on the Program, so what you pay into the Program is actually untouched and not taken in fees. The settlement fee is calculated on the amount forgiven by your creditors. This means the fee is based on the amount the business saves you. The company should only collect a settlement fee once a settlement has been completed. This will allow you to get out of debt much more quickly and gives the company incentive to get you the best possible settlement!

Does the Debt Reduction Organization offer Debt and Credit Counseling?

Most Debt Negotiation Companies offer only debt settlement. A true Debt Assistance Company
will give Credit and Debt counseling as well as Debt Consolidation and Debt Settlement Programs. Your Credit Counselor should help you consider all your options so you can pick which service is the right one for your situation and budget. The business should not push one program but should assist you in choosing the right program for you.

How Long has the Debt Reduction Company Been in the Debt Assistance Business?

If it is a start up or brand new in the business, the company will have no experience. Always be leery of a organization that will not provide verification of their experience.

Can the Debt Management Company Stop the Creditors From Contacting Me?

No Debt Consolidation Company can ensure they will end all collection calls. That is simply not possible. Anyone who claims they will is not telling the truth.

Will The Debt Reduction Organizations be making monthly payments to the Credit Card Companies?

The Collection Agencies are not paid until a mutually agreeable settlement is reached and agreed to. Therefore, Debt Reduction Service Organizations do not make monthly payments to the collection agencies. That is simply how the program works. Any Debt Consolidation Organization telling you otherwise is not being truthful.

Can I be sued?

A credit card company can always sue you. If you are told something else, a red flag has just been raised. The debt reduction company is not being truthful.

Will This Have a Negative Effect on my Credit Report?

Contrary to what most people think or believe, all debt negotiation programs will ruin your credit report. Think about it,you are in debt and are not paying as agreed. The debt settlement program is meant only as a management tool. However once your debt has been settled, your accounts will show a $0 balance and you are ready to begin the process of reestablishing your credit report.

When Can I Expect My First Settlement?

While this is different in every case, your first settlement can be made within the first 12 months from the start of your program. Any more than 12 months is not acceptable and the company that tells you this is more than likely not a good match for you.

Where is the Funds Held While I'm Waiting on a Negotiation?

This is a very good question. Your funds must always be kept at a third party escrow organization that is FDIC insured. Any business telling you to keep your own money or to send the money to them is not the one for you. If you want to settle your debt, you will need to have the money available to pay the creditors when the settlement is negotiated.

These questions are suggestions. The most important point is to ask many questions and get the right answers to those questions. With your questions fully answered, you can find the Debt Negotiation Organization Company that is best able to help you.

Article Source: http://depositarticles.com/

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