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Questions you should ask a Debt Negotiation Organization

By: Mel Gibbs A A

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Always Ask These Questions Before You Select a Debt Consolidation Company

Does the Company have an "A" rating with the Better Business Bureau?
Always check with the BBB the rating of a Debt Negotiation Organization before you select them. Don't just take the company's word for it. Contact the BBB and ask about the business.
How Much Does the Program Cost and When is the Compensation Taken?
Most Debt Negotiation Organizations receive 15% to 20% of your total debt as compensation for their assistance. This fee is based on the amount of debt you have when you go into the program and is received up front. With the business' upfront payment taken out in the first 12 to 18 months, most of what you pay into their service is taken by them as compensation. Once they have taken their fee there is no incentive for them to do their job.
In a legitament Debt Settlement Program you only pay a small enrollment fee to go into the Program, so what you deposit into the Program is actually held in reserve and not collected in fees. The settlement fee is based on the amount forgiven by your creditors. This means the fee is based on the amount the company saves you. The business should only take a settlement fee once a settlement has been attained. This empowers you to get out of debt much much quicker and gives the organization compulsion to get you the best possible settlement!
Does the Debt Management Business offer Debt and Credit Counseling?
Most Debt Settlement Businesses offer only debt settlement. A bona fide Debt Assistance Company
will provide Credit and Debt counseling as well as Debt Consolidation and Debt Settlement Programs. Your Credit Counselor will help you explore all your options so you can choose which program is best for your situation and budget. The company should not promote one program but should assist you in choosing the best program for you.
How Long has the Debt Settlement Company Been in the Debt Assistance Business?
If it is a start up or brand new in the business, the organization will have no experience. Always beware of a company that won't provide verification of their experience.
Can the Debt Relief Company Stop the Creditors From Calling Me?
No Debt Management Business can promise they will end all collector calls. That is simply not possible. Anyone that says they can is not being truthful.
Will The Debt Settlement Businesses be making monthly payments to the Collection Agencies?
The Collection Agencies are not paid until a mutually agreeable settlement is negotiated and approved. Therefore, Debt Reduction Businesses do not make monthly payments to the credit card companies. That is simply how the program works. Any Debt Consolidation Business telling you otherwise is not being honest.
Can I be sued?
A credit card company can always sue you. If you are informed of something else, a red flag has just been raised. The debt relief company is not telling the truth.
Will This Have a Negative Effect on my Credit Score?
Inspite of what some people think or believe, all debt assistance services will have a negative effect on your credit score. Consider this, you are in debt and are not paying as agreed. The debt relief program is meant only as a management tool. However once your debt has been negotiated, your accounts will show a $0 balance and you will begin reestablishing your credit score.
When Will I Receive My First Settlement?
While this varies in every case, your first settlement will be made within the first 12 months from the inception of your program. Any more than 12 months is not reasonable and the organization that informs you of this is not a good match for you.
Where is the Money Kept While I'm Waiting on a Settlement?
This is a very important question. Your funds should always be kept at a third party escrow business that is FDIC insured. Any business informing you to keep your own money or to send the funds to them is probably not the one for you. If you need to settle your debt, you will need to have the money on hand to pay the collection agencies when the settlement is agreed to.
These questions are suggestions. The important point is to ask many questions and get the answers to those questions. With your questions answered, you can find the Debt Relief Business Organization that is right for you.

Article Source: http://depositarticles.com/

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