Questions you should ask a Debt Reduction Company Does the Company have an "A" rating with the Better Business Bureau?Always check with the BBB the rating of a Debt Consolidation Company 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 Assistance Cost and When is the payment Taken?Most Debt Management Businesses charge 15% to 20% of your total debt as a fee for their assistance. This fee is calculated on the amount of debt you have when you enroll in the service and is taken up front. With the organization's upfront payment taken out in the first 12 to 18 months, the bulk of what you pay into their program is taken by them as fees. Once they have collected their fee there is no motivation for them to do their job. In a bona fide Debt Settlement Plan you only pay a small enrollment fee to go onto the Program, so what you deposit into the Service is actually untouched and not eaten up 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 company should only receive a settlement fee once a settlement has been completed. This helps you to get out of debt much quicker and gives the company motivation to get you the best possible settlement!Does the Debt Settlement Company offer Debt and Credit Counseling?Most Debt Consolidation Organizations 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 should help you consider all your options so you can choose which service is the best for your situation and budget. The company should not encourage one service but should assist you in choosing the most appropriate program for you.How Long has the Debt Negotiation Organization 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 be leery of a company that will not provide verification of their experience.Can the Debt Reduction Organization Stop the Collection Agencies From Contacting Me?No Debt Reduction Organization can promise they will stop all collector calls. That is simply not possible. Anyone who claims they will is not being honest.Will The Debt Negotiation Organizations be making monthly payments to the Collection Agencies?The Credit Card Companies are not paid until a mutually agreeable settlement is reached and approved. Therefore, Debt Reduction Plan Businesses do not make monthly payments to the credit card companies. That is simply how the service works. Any Debt Settlement Organization telling you otherwise is not telling the truth.Can I get sued?A collection agency can always sue you. If you are informed of anything else, a red flag has just been raised. The debt settlement organization is not being honest.Will This Hurt my Credit Report?Inspite of what most people think or believe, all debt assistance programs will have a negative effect on your credit score. Think about it,you are in debt and are not paying as agreed. The debt relief 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 the process of reestablishing your credit score.When Will I Receive My First Settlement?While this is different in every case, your first settlement will be made within the first 12 months from the inception of your program. Longer than 12 months is not acceptable and the business that tells you this is probably not a good match for you.Where is the Money Kept While I'm Waiting on a Negotiation?This is a very good question. Your funds must always be held at a third party escrow business that is FDIC insured. Any business informing you to save your own money or to send the money to them is not the one 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 agreed to.These questions are suggestions. The important point is to ask many questions and get the right answers to those questions. With your questions answered, you can find the Debt Negotiation Organization Company that is right for you.
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The main point is to ask lots of questions and get the right answers to those questions. With your questions answered to your satisfaction, you can find the Debt Settlement Business Business that is best able to help you.
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