These days, with more and more Americans losing their jobs and their homes, many turn to debt settlement services for assistance.
What these companies do is to consolidate your debts into one monthly payment that you make to them in order to pay your debts off. The way they do it is by making arrangements with your credit cards and other creditors, explaining to them that you’re having difficulty and creating a payment plan you can manage. The services really do work well and they can arrange to settle your debt, often for significantly less than you might be able to on your own.
However, be aware of the fact that where there’s human suffering, scam artists aren’t far behind. These con artists will pretend to be legitimate debt settlement services, but in reality they will run away with your money. Many have fallen victims to such unfortunate circumstances. So, how do you choose a good debt settlement service?
Here are a few simple tips which should help:
- Reputations are everything. It’s not that a new company wouldn’t be able to do a good job; it’s just that finding an established company means you know they’ll be there for the long haul. If you want to use a new company, ask about their background – learn who they have worked with before and be sure to check their references. Also request for a complete list of fees and full cost disclosures
- Check the Better Business Bureau. This process usually doesn’t take too long and if the company has had complaints, they will be listed with the BBB and you can then make an informed decision. You can get recommendations from your local Chamber of Commerce as well.
- Last but not least, Google is your friend. If you find a place you feel you can trust, use Google to search for their name (put the name is quotation marks) along with the word scam. If the company has ripped off other people, a simple search will turn it up.
Summing up, while debt settlement is very effective way to get out of debt and can work in your favor more than claiming bankruptcy would, it is important that you do research and compare several debt settlement companies to qualify and determine the company that meet your very specific financial situation. Choose the one that is going to cost the least amount of money in the long term. This means the lowest interest rate with a reasonable term.
If you’re looking for a lost cost solution, many non-profit organizations offer debt settlement services in their community that can assist you with your debt problems (or learn how to write your own debt settlement letter) And if you decide to go with a non profit agency for help, make sure that the assistance is going to come from someone who is an expert in financial matters.