Debt reduction negotiation may be the solution to your debt problem if you are at your wit’s end and have tried all other options for reducing your debt, short of filing for bankruptcy.
You’re in a bad condition because you’re looking into debt settlement possibilities. You’re stressed and worried, and all you want is for everything to be repaired right now.
This is the time when you must use extreme caution. Don’t choose the first debt reduction negotiation firm that pops up when browsing for one. Ask inquiries to ensure they are looking out for your best interests rather than their own. If you’re not careful, you can find yourself in worse trouble than you were before.
The settlement company you choose should be a member of TASC, or The Association of Settlement Companies. The Group of Settlement Companies is the largest trade association in the debt negotiation industry, holding its members to high industry standards.
Be wary of companies who want payment in advance. Some debt settlement firms charge a percentage of your debt as a fee and do not guarantee outcomes. That is, you pay whether or whether they assist you. Only pay after the debt collection firm has obtained results and established an arrangement with you. Inquire if the company you hire can promise that they will save you money, and get that assurance in writing. Do not hire them if they will not give you a written guarantee.
A shady firm may claim that they can guarantee that your creditors will stop calling you. Doesn’t it sound appealing? But, a reputable company will inform you that they will make every effort to stop any creditor calls, but that this may not be possible. A good company should also tell you upfront that they can’t promise you won’t be sued by one or more of your creditors. If they are worth their salt, they should agree to continue discussing a settlement even if a lawsuit is filed.
You may have heard that working with a debt consolidation company can harm your credit score. True, but in the larger scheme of things, your credit report should be the last thing on your mind right now. At this moment, your primary focus should be on paying off that mountain of debt you’ve been carrying for so long.
It’s difficult for a company to expect how long it will take you to get a settlement offer and pay off your debt because everyone’s situation is different. Look for settlement offers from your creditors three to twelve months after employing a debt settlement firm.
Also, be wary if the debt settlement firm you’re considering urges you to send them money that should be going toward paying off your debt. The funds should be placed in an FDIC-insured escrow account with a third-party escrow company and held there until a debt reduction agreement is reached.