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Questions you should ask a Debt Relief Organization

By: Mel Gibbs A A

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

Does the Business have an "A" rating with the Better Business Bureau?
Always verify with the BBB the rating of a Debt Relief Business before you select them. Don't just take the organization's word for it. Call the BBB and inquire about the business.
How Much Does the Service Cost and When is the payment Taken?
Most Debt Reduction Organizations receive 15% to 20% of your total debt as a fee for their program. This payment is based on the amount of debt you have when you enter into the service and is collected up front. With the company's upfront payment collected in the first 12 to 18 months, most of what you pay into their service 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 Service you only pay a small admittance fee to go on the Service, so what you deposit into the Service is actually put aside and not collected in fees. The settlement fee is calculated on the amount forgiven by your creditors. This means the fee is based on the amount the company saves you. The business should only collect a settlement fee once a settlement has been completed. This allows you to get out of debt much much quicker and gives the organization incentive to get you the best possible settlement!
Does the Debt Assistance Business offer Debt and Credit Counseling?
Most Debt Negotiation Companies offer only debt settlement. A bona fide Debt Assistance Company
will provide Credit and Debt counseling as well as Debt Consolidation and Debt Settlement Services. Your Credit Counselor will help you evaluate all your options so you can pick which service is right for your situation and budget. The business should not promote one service but should help you in choosing the right service for you.
How Long has the Debt Relief Organization Been in the Debt Reduction Business?
If it is a start up or brand new in the business, the organization will have little experience. Always be leery of a business that will not provide proof of their experience.
Can the Debt Relief Business Stop the Creditors From Contacting Me?
No Debt Relief Organization can promise they will stop all collector calls. That is simply not feasible. Anyone who says they can is not being truthful.
Will The Debt Relief Businesses be making monthly payments to the Credit Card Companies?
The Credit Card Companies are not paid until a mutually agreeable settlement is reached and agreed to. Therefore, Debt Relief Organizations do not make monthly payments to the collection agencies. That is simply how the program works. Any Debt Negotiation Business saying otherwise is not telling the truth.
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 business is not being truthful.
Will This Ruin my Credit Report?
Inspite of what some people think or believe, all debt consolidation services will hurt your credit report. Think about it,you are in debt and are not paying as agreed. The debt consolidation service is meant only as a management tool. However once your debt has been negotiated, 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 varies in every case, your first settlement can be made within the first 12 months from the inception of your service. Any more than 12 months is not reasonable and the company that tells you this is more than likely not a good match for you.
Where is the Money Held While I'm Waiting on a Settlement?
This is a great question. Your money must always be kept at a third party escrow business that is FDIC insured. Any organization telling you to keep your own money or to send the money to them is probably not the one for you. If you need to settle your debt, you need to have the money on hand to pay the credit card companies when the settlement is reached.
These questions are suggestions. The main point is to ask many questions and get all the answers to those questions. With your questions fully answered, you can find the Debt Management Company Business that is right for you.

Article Source: http://depositarticles.com/

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