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In an uncertain economy, debt settlement can be a sound prescription toward achieving financial wellness. The debt relief solution has triumphed as a bankruptcy deterrent for millions of Americans burdened by credit card debt. It’s widely favored because it provides a more substantial debt reduction than a credit counseling debt management plan. Additionally, it assures credit card companies and other creditors a greater assurance of collecting faster payment. But, not doing your homework to locate the best debt settlement companies can be a prescription for disaster. The Internet is a great place to start your search. Although their aim is to negotiate with creditors a massive debt reduction of your total debt, including the interest, principal, and fees, no two companies are entirely alike. There are key differences in their customer service, negotiation strategies, and fees. Thus, online research is a must to properly compare your options. These three important tips will help boost your research: 1. Never Pay Excessive Fees According to federal regulations, debt settlement fees must be based on the amount of the debt enrolled in the debt settlement program. The industry average in fees is 15% of the total enrolled debt. But, numerous companies exploit consumers with exorbitant fees. Any fee over 15% is considered excessive. For example, an 18% fee on a $30,000 debt would end up costing you $5,400. A high fee is also a sign that the company may outsource debt negotiations to a back end provider, thus increasing operating costs. Or perhaps the company splits fees with a referral affiliate and passes the additional cost on to you. In contrast, the best debt settlement companies can charge lower fees because they don’t need to farm out their services. Plus, most of their business comes from word of mouth. 2. Avoid Debt Reduction Programs That Are Over 36 Months Debt settlement programs are designed to be completed in 36 months. The best debt settlement companies complete their programs in 12-28 months because it helps their clients pay less in credit card fees and interest charges. They also recognize that extending their programs to 48 months or more increases the risks of collection lawsuits. Thus, the sooner you can settle your debt, the more money you will save and the lesser potential of a property lien or wage garnishment. 3. An In-House Debt Negotiator Gets You the Best Results You’d be surprised to learn that many debt settlement companies outsource the most vital component of their services, which is debt negotiation. Even debt settlement law firms often contract out debt negotiations to third party negotiators. Only the best companies make it a priority to have trained debt negotiators on staff. The degree of experience of the negotiator really counts. In the event a credit card company serves you a collection lawsuit, in lieu of letting it become a judgment, a strong negotiator can help you reach an out of court settlement. Good professional assistance will also make all the difference in the world to increase your chances of a good settlement. So, remember to do your homework on your debt relief options. Shop around and compare price, debt settlement program lengths, and reliability. You’ll be glad you did. Article Source: http://EzineArticles.com/?expert=Vic_Chevalier
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But who are we really having the debt settlement co’s negotiate with, the collection agencies or the original creditors. Most of our credit card debt is now with collection agencies. We assume that means the debts were sold to the collection agencies? We want to get out of debt desperately as it’s holding us back from making any financial progress in life. Thank you for these tips. We hope our question can be answered on your blog.
It all depends on the actual state of “non-payment” of your debt. If the debt has been in collections and is 60-90 days delinquent, most likely the original creditor has outsourced to a third-party collection agency to attempt to collect the debt. However, if the credit card bill has been delinquent for 180 days, you will notice on your credit reports that the original creditor declared the debt as a “charge off” or “write off.” BTW, they are required to do this under federal statute to have the credit card debt categorized as a business loss. And if this is the case, it’s likely that the creditor also sold off your debt for pennies on the dollar to a debt buyer. Be forewarned, debt buyers are utterly aggressive! They outsource debt collection to some of the nastiest collection agencies and collection attorneys. Nevertheless, we can help you regardless of the non-payment status of your debt and the collection stage. When you call us, we’ll address your questions in greater detail.
I am so happy I found your company’s website on Google. A divorce this past year has completely wrecked my credit and I need a debt settlement company to help me get out from under the stress that the debt is causing me. I hope your negotiators can help me avoid legal proceedings against me.
Sorry to hear about your divorce. A beauty of the debt settlement procedure (if you can find a debt settlement company with experienced debt negotiators), is that it can help you prevent legal action. But, even if a collection account manifests into a creditor lawsuit, as in the following example, you can still reach an out of court settlement…. http://www.debtfreeleague.com/pdf/Website%20-%20Settlements_3.pdf
Charmaine, sorry to hear about your credit. Fortunately, we have well-trained in-house debt negotiation staff to assist you.
Some years ago I enrolled in a debt settlement plan to try and attempt to get out of debt, which was constantly stacking against me. Like many people, it all started out with a credit card; then from there things got out of hand relatively quickly. Thankfully I am getting back on my feet and trying to be a more responsible person with my spending habits. I wish I had been aware of information like this sooner, as like many people I had to pay back more then what I owed because of what you call “excessive” fees. I always thought added “interest” or what have you was normal in situations like this. I’m glad your able to share this sort of information, and hopefully people will find it before jumping into a debt settlement program.
“Never Pay Excessive Fees” I go by this all the time, I never agree to any type of Excessive Fees, its a waste of time and credit to me along with such a risk that I am not comfortable taking. I hope everyone else is doing the same thing with that! Great Tip by the way! That is awesome for this blog post!
It’s amazing to me that a debt negotiation company would outsource the actual negotiation. It’s good information to know what is a normal fee versus an excessive fee. Even a few % points can make a massive difference in the end fee.