A Debt Settlement or Debt Relief Company assists people who are in financial hardship pay off their debts. These debt relief companies have some of the best negotiators and can add value to people in debt by reducing the debt they owe to creditors significantly.

This is a better option than filing bankruptcy and if you are at a place where you are considering debt relief then here are five things your debt relief company SHOULD be doing while you are in the program.

But, before we begin here are some reasons why a debt settlement program may be better than filing bankruptcy.

•A Debt Settlement Program May Avoid You Bankruptcy: A debt settlement program may be the perfect answer to avoiding bankruptcy.

With the rates of payback cut down, it becomes easier to settle debts. America has over $12 trillion of public debt, which includes a large list of bankrupt parties.

Bankruptcy is a serious problem and has a large number of complications that follow it. Thus, if falling into the pit of bankruptcy can be avoided, it should.

•Relief from Large Credit Card Debts: The USA has an enormous $542 Billion debt in credit cards alone. A debt settlement program assures negotiation with your bank and brings down your credit payments.

However, this has drawbacks as your credit score might take a heavy hit. This will pile up a new misery as banks and creditors will no longer be interested in supplying you with loans.

Debt Settlement agencies have successfully negotiated for over 30 million US citizens over the phase of time. Thus, credibility cannot be easily questioned. Also, their efficiency to negotiate with clients for more reasonable rates makes them great.

If you do decide to work with a debt settling program here are:

5 Things Legit Debt Settlement Companies SHOULD Be Doing.

1.Have Honesty and Transparency in the Program

It is essential to make sure the debt relief program you consider has complete honesty and integrity when it comes to your client relationship. This means that you need to be honest and transparent as well.

Debt Settlement programs are not just a mere means of a person paying off his or her “negotiated” debt. Much like what a person might expect from a debt settlement company to follow ethical policies so will be the companies to expect the same from you.

While you are struggling to pay your debt back, these companies help you by negotiating with your creditors to ask for settlement time.

Therefore, you must do the homework and assure not to breach any terms. With this said, here are some specific ideas, you must take responsibility to stay on the safer side,

• In the first meeting with the representatives of the debt settling companies, assure that you read between their lines.

You will also require establishing and discussing your current financial conditions. This will help the debt settlement agencies to get a clear vision of your case.

This is one ethical practice from your side, which allows them to negotiate with your creditors on your behalf.

• The charges of debt settlement companies vary depending on your case. It is your responsibility to go for a complete analysis of the company and make sure all the agendas are clear.

While preparing the paperwork, be sure to settle most systematically, and assure not to overpay. With the term overpay, it conveys the act when a debtor gets a large sum of money, and tends to clear his debts immediately.

If a person is under the terms of the debt settlement program, the payment should be made as per the agreement of the program.

• Alternatively, paying less than the agreed amount is also a violation of the agreement. You must plan according to the time range you receive.

In a general case, a person failing to pay the money can cause a lot of problems to the settlement agencies.

2. Clear Communication Assures Convenience in Paying Debts

Debt Settlement companies can negotiate your debts to a particular case, where you are left with breathing space and clear all your old dues.

With this said, all the details you have to offer the company, and you require from the company’s end must be transparent.

While debt settlement is all about the negotiation of time and amount, there are certain factors, the agencies should assure, which includes,

• Give you a clear picture of the negotiation. A certified professional debt settlement company will try with its valiant effort to reduce your debt amount with time. Some agencies come with time bargain, which allows debtors to accumulate enough funds to pay off. It is unlikely that you will feature in the talk sessions between your creditor and the agency. What you can expect from the agency is to report every detail they have come up.

• Sometimes, bargains in time become a big factor for a debtor and the period extension comes to play. Thus, the agency should produce complete details of payments in accordance with time.

This comes up with many negotiations with the creditors, and the company hopes to tame down lump payments.

• All of the other details, viz. payment schemes, and your current financial portfolio should be presented before the agency. With this number of assurance, the agency will communicate and guarantee you to have a fraud-free negotiation.

• Change of new terms in accordance with the newer settlement should be duly formed from the company itself. This method comes up when all three parties accept to move forward, considering the fact that you may have a little say.

With the age of technology, some of the debt settlement agencies will send you a digital copy of the newest negotiated rates.

The promptness of all talks and remaining in touch with the debtor make the program work easier.

3. Charges Taken by Debt Settlement Agencies

Debt Settlement agencies are as any other companies have workers and policies to follow up. This means in order to operate the same, they are likely to charge some amounts of money directly from the debtor.

However, most of these companies only charge money after all of your settlement is complete. The likelihood of a fraud agency will be the fees they charge, just for a session appointment.

Here are some points to follow up for all who might deal with these agencies are as follows,

• According to the norms approved by the Federal Trade Commission’s Telemarketing Sales Rule, charging upfront fees is illegal.

The rule came to power in the year 2010 and followed up a theory that it is illegal for a debt settlement company to charge debtors upfront.

The only phase they can collect the same is after the settlement is complete. Having said that, debtors will pay for creating the escrow account, which is the payment gateway scheme.

• Debt Settlement company has the right to charge the debtors for clearing one debt at a time.

This means if a person has cleared debts for one creditor, the agency can charge their cut after they have resolved one issue for the time. This will not count under the Federal Act, as the agency has cleared dues for one creditor.

• Different states in the USA have distinct laws stated to the debt settlement industry. While some of the states have adopted to seek via the Uniform Debt Management Services Act, others have regular FTC laws.

According to the Uniform Debt Management Services Act, a debt settlement agency requires to disclose all of their services, fees and the pros and cons of their services.

• The fees charged by a debt settlement agency are usually a proportion of how much they can reduce. More they save for you is what they can charge from your savings.

However, a standard company will try their best to give you the best rates. For instance, if a company settles for 10,000 USD from your original debt of 20,000 USD, they can charge up to 50% from 10,000 USD they have saved.

4. Best Settlement Negotiations for You

Debt Settlement Agencies do not follow any pattern to negotiate with your creditors. They understand the mindset of the creditor and negotiate according to how much debt is remaining for you to clear.

This is what makes them so good at putting a great bargain. Sometimes, a debt settlement agency requires bargains for months, which can lower the payback rates.

• A good debt settlement program is always the result of a company trying its level best in assuring you get the best rate. In a regular case, the debt settlement companies may ask you to stop your settlement for a temporary period.

The debt settlement companies will consider monthly payment and settle different debts accordingly. The key point to note is the amount paid from your end to the settlement companies is a phase.

In the meantime, debt settlement agencies will keep on pitching lower rates with the creditors, assuring to reduce the rates to the lowest limits.

• The job of a debt settlement agency is to convince the creditor for a sum of amount, which is usually lesser. Since the last thing, your creditor will fear you filing bankruptcy, and they are left with nothing, will accept to the terms of your debt settlement agency.

However, the rates and percentage of the bargain will come in accordance with the amount you are under debt. It is to be noted that there is no guarantee your creditor will accept to the regular terms.

5. Debt Settlements are to be Authorized Every Time

Paying off debts becomes difficult every single minute for a person under financial constraints. For a debt settlement company to work for such a person, negotiations are a key to reduce further stress.

These debts are authorized in paper terms, which give a formal assurance to both the debtor and creditor. Likewise, over time, the debts are cleared with systematic monthly payments.

• Debt settlement agencies have a responsibility to call the debtors to assure and proceed with the payments every time. This assurance comes in the form of verbal assurance, while some companies require minor paper receipts for every payment.

These paper-based receipts are vital for the debtors, which helps them to keep track of the payments and dues every month. Furthermore, these receipts help them to chalk out the tax deductions, which are to be cleared to the IRS.

• Authorization is a quality check measure for any debt settlement agency. This is one of the main criteria for an agency to display every debtor.

This gives the debtor a feel of realization that all the money, he or she is paying, is reaching the rightful destination.

Furthermore, all the papers and documents in the past have the assurance for the legality of the company.


A good Debt Settlement program with ample planning and negotiation could well save up the debtor. This assures to keep his profile up with regular stature and avoids bankruptcy.

With this said, it is a moral responsibility of the debtor to keep up with the agreed amount to avoid future issues. Typical debt prone industry includes credit card, mortgage, and many others.

Thus, a good Debt settlement program contains terms and means to buy the debtors a good time to settle with the creditor hoping to recover his or her funds.


Schedule a free consultation today for a risk-free debt assessment. The only thing you have to lose is your debt.