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Questions you should ask a Debt Settlement Organization

By: John Glenn A

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Always Ask These Questions Before You Employ a Debt Management Organization

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

Always verify with the BBB the rating of a Debt Negotiation Business before you employ them. Don't just take the company's word for it. Call the BBB and inquire about the business.

How Much Does the Program Cost and When is the Compensation Received?

Most Debt Relief Companies charge 15% to 20% of your total debt as payment for their service. This fee is calculated on the amount of debt you have when you enter the program and is received up front. With the company's upfront compensation taken out in the first 12 to 18 months, almost all of what you pay into their program is taken by them as compensation. Once they have received their fee there is no compulsion for them to do their job.

In a bona fide Debt Consolidation Program you only pay a small enrollment fee to go into the Program, so what you pay into the Program is actually untouched and not collected in fees. The settlement fee is calculated on the amount forgiven by your creditors. This means the fee is calculated on the amount the business saves you. The business should only receive a settlement fee once a settlement has been obtained. This empowers you to get out of debt much more quickly and gives the company motivation to get you the best possible settlement!

Does the Debt Settlement Business offer Debt and Credit Counseling?

Most Debt Relief 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 should help you explore all your options so you can pick which program is the right one for your situation and budget. The organization should not promote one service but should help you in choosing the best program for you.

How Long has the Debt Reduction Business Been in the Debt Negotiation Business?

If it is brand new or a start up in the business, the company will have almost no experience. Always beware of a company that will not provide proof of their experience.

Can the Debt Negotiation Organization Stop the Creditors From Contacting Me?

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

Will The Debt Management Companies be making monthly payments to the Creditors?

The Collection Agencies are not paid until a mutually agreeable settlement is reached and agreed to. Therefore, Debt Negotiation Organizations do not make monthly payments to the credit card companies. That is simply how the program works. Any Debt Settlement Business saying otherwise is not telling the truth.

Can I get sued?

A collection agency can always sue you. If you are told something else, a red flag has just been raised. The debt management organization is not being honest.

Will This Hurt my Credit Score?

Contrary to what some people think or believe, all debt negotiation programs will hurt your credit score. Consider this, you are in debt and are not paying as agreed. The debt assistance service is meant only as a management tool. However once your debt has been forgiven, 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 longer than 12 months is unacceptable and the organization that informs you of this is more than likely not a good match for you.

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

This is a great question. Your money should always be held at a third party escrow organization that is FDIC insured. Any business telling you to hold your own money or to send the funds to them is probably not the one for you. If you want to settle your debt, you must have the money on hand to pay the credit card companies when the settlement is negotiated.

These questions are suggestions. The most important point is to ask questions and get all the answers to those questions. With your questions fully answered, you can find the Debt Settlement Company Organization that is right for you.

Article Source: http://depositarticles.com/

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