Getting debt relief through debt settlement involves negotiating an agreement with creditors to legally satisfy a debt for less than the total amount owed. While some may choose to go it alone, many people choose to hire the assistance of a debt settlement company. Do all debt settlement companies work the same? What’s a reasonable settlement amount? To shed light on the questions you should ask before working with a debt settlement company, read on.
Knowing What to Ask a Debt Settlement Company
What are the most important questions to ask the debt settlement companies you’re considering? There are numerous aspects of debt settlement that should be addressed before proceeding.
How much are their fees?
Debt settlement company fees will vary depending on your case. Be sure to run a complete analysis of the plan to ensure there won’t be any unexpected charges throughout the process.
In 2010, a ruling called the Federal Trade Commission’s Telemarketing Sales Rule states that charging upfront fees is illegal. The only phase they’re allowed to collect fees is after the settlement is complete.
That said, a debt settlement company has the right to charge the debtors for clearing one debt at a time. Typically, fees are taken as a percentage of the total amount settled, so that means the more your debts are reduced, the more your fees might be.
What are your certifications?
Check to see if the debt settlement company has certifications that state they pledge to treat their customers honestly, fairly, and transparently. A key element of trustworthiness when it comes to debt relief companies is being accredited by professional trade associations. Companies that belong to at least one trade association like the American Fair Credit Council or International Association of Professional Debt Arbitrators rank highest with their clients.
How long have you been in business?
How long the debt settlement company has been in business is vital. The more well-established the company is, in general, the more likely they are to stick around than newer ones. Stability is essential when you’re establishing a business relationship for as much as three to five years. You’ll want to be able to rest assured that the debt settlement company will be around for you until the end of your debt settlement agreement.
Where will my money be held?
If your credit situation isn’t good enough for a consolidation loan, it might be possible to get a debt settlement instead. In a debt settlement, you negotiate with your creditors to reduce your balances in exchange for repaying them in a lump-sum or structured payment schedule. The biggest downside to this method is that you often must close any accounts included in the settlement, which could hurt your credit score in the short term.
How will this affect my credit?
Whether your debt relief strategy is to get a debt consolidation loan or for debt settlement negotiation, the accounts included in the settlement could stay on your credit report for years as a “not paid in full” status. This can drag down credit scores for a couple of years or more, so if you’re going this route, it’s smart to get an agreement from the creditor beforehand that they’ll note the account “paid in full” in return for the settlement payment.
Can you give an exact timeline for my settlement?
Most debt settlement programs will typically last between 24-48 months. That said, there are numerous factors such as delinquency, creditor policies, the number of accounts, and the total dollar amount of the debt that can affect the timeline for your particular settlement. So, the best way to get an exact timeline is to call us to discuss your scenario fully.
When will my debt settlement be complete?
Typically, even the best debt settlement companies will still take around 3-5 years to fully settle your debts and provide debt relief. That said, it may be possible for a company to cut this time down to less than 3 years.
Effective debt settlement companies will be able to show a strong track record of getting the job done in a timely way. By having established working relationships with the biggest financial institutions and collection agencies, they’re able to better expedite debt negotiations.
Are They Better Business Bureau (BBB) Accredited?
The Better Business Bureau has existed for more than 100 years now, providing consumers with a system for reviewing and comparing businesses through a defined reviews and ratings process. Accreditation with the BBB is a key trait to look for, because it shows a good-faith effort of the company to resolve any issues customers may have.
Work With a Debt Settlement Company You Can Trust
Demand An Experienced Debt Settlement Team
Established debt settlement companies will have the experience and relationships necessary to get the best possible outcomes for their clients. That’s why it’s essential to seek out debt settlement companies that have established a solid reputation of getting results for clients. Alleviate Financial has years of experience with delivering the best results.
Read The Company’s Better Business Bureau Reviews
BBB accreditation alone isn’t enough—you also need to give strong consideration to any customer reviews and complaints registered through the BBB. These reviews about a debt settlement company will tell you a lot about how they operate and treat their clients. Customers who leave reviews with the BBB can rate the debt settlement company using a star rating system of 1 to 5, with 5 stars being the best. Alleviate Financial is proud of our 5-star BBB rating.
Debt Settlement Services You Can Count On
When you need a debt settlement company who will stop at nothing to help you become debt-free, Alleviate Financial can help you get started today.
Contact our team of debt settlement specialists to get an honest expert analysis of your entire financial picture to uncover your best options.