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Questions you should ask a Debt Relief Business

By: John Glenn A

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Be Sure to Ask These Questions Before You Employ a Debt Consolidation Company

Does the Organization have an "A" rating with the Better Business Bureau?
Always verify with the BBB the rating of a Debt Assistance Organization before you employ them. Don't just take the organization's word for it. Telephone the BBB and inquire about the business.
How Much Does the Service Cost and When is the Compensation Collected?
Most Debt Management Businesses receive 15% to 20% of your total debt as payment for their service. This compensation is based on the amount of debt you have when you enroll in the program and is received up front. With the organization's upfront payment coming out in the first 12 to 18 months, the bulk of what you pay into their service is taken by them as compensation. Once they have collected their fee there is no compulsion for them to do their job.
In a bona fide Debt Settlement Program you only pay a small admission fee to go on the Service, so what you pay into the Program is actually held in reserve and not eaten up in fees. The settlement fee is calculated on the amount forgiven by your creditors. This means the fee is calculated on the amount the company saves you. The company should only collect a settlement fee once a settlement has been reached. This allows you to get out of debt much more rapidly and gives the organization compulsion to get you the best possible settlement!
Does the Debt Relief Company offer Debt and Credit Counseling?
Most Debt Consolidation Businesses offer only debt settlement. A true Debt Assistance Company
will give Credit and Debt counseling as well as Debt Consolidation and Debt Settlement Services. Your Credit Counselor should help you consider all your options so you can pick which program is right 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 Relief Organization Been in the Debt Assistance Business?
If it is brand new or a start up in the business, the organization will have very little experience. Always beware of a business that won't provide verification of their experience.
Can the Debt Settlement Company Stop the Creditors From Telephoning Me?
No Debt Consolidation Organization can promise they will end all collection calls. That is simply not feasible. Anyone that claims they will is not being honest.
Will The Debt Consolidation Companies be making monthly payments to the Collection Agencies?
The Creditors are not paid until a mutually agreeable settlement is negotiated and agreed to. Therefore, Debt Settlement Companies do not make monthly payments to the collection agencies. That is simply how the service works. Any Debt Reduction Business telling you otherwise is not being truthful.
Can I be sued?
A creditor can always sue you. If you are informed of something else, a red flag has just been raised. The debt relief organization is not being honest.
Will This Hurt my Credit Score?
Inspite of what most people think or believe, all debt negotiation services will ruin your credit report. Think about it,you are in debt and are not paying as agreed. The debt reduction program is meant only as a management tool. However once your debt has been settled, your accounts will show a $0 balance and you can begin reestablishing your credit score.
When Will I Get My First Settlement?
While this can vary in every case, your first settlement can be made within the first 12 months from the start of your program. More than 12 months is unacceptable and the organization that tells you this is not a good match for you.
Where is the Funds Held While I'm Waiting on a Negotiation?
This is a great question. Your funds should always be kept at a third party escrow business that is FDIC insured. Any business telling you to hold your own money or to send the funds to them is more than likely not right for you. If you plan on settling your debt, you must have the money on hand to pay the collection agencies when the settlement is negotiated.
These questions are suggestions. The main point is to ask lots of questions and get the answers to those questions. With your questions answered, you can find the Debt Reduction Organization Company that is right for you.

Article Source: http://depositarticles.com/

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