10 Questions to Ask When Evaluating a Debt Settlement Company

Evaluating a debt settlement company can be tough.  It seems that wherever you turn some debt relief company is trying to get your attention via a variety of channels from radio, TV, the Internet, e-mail, to even the bus bench.  Who can you trust? Who is reputable? And, more importantly, who is going to actually perform for you?  

As discussed in previous postings (see “Commitment“), entering a debt settlement program is a LONG-TERM commitment.  It takes a great deal of time and effort for the debt settlement company to negotiate settlements and it takes time and effort for you, the client, to save money for the settlements.

When evaluating doing business with a debt settlement company there are many important questions to ask.  However, the following items represent what I consider to be the “top 10″ questions to ask as you investigate various debt settlement companies:

1. How long have you been in the debt settlement business? In my opinion the answer needs to be at least 10 years.  Any less and the company does not have enough of a track record to provide feedback on average settlement rates etc. 
2. Are you going to be handling my settlements or do you outsource this to a third-party?  Generally speaking you do NOT want to be dealing with more than one company.  You are going to feel more at ease dealing with a single entity rather than several.
3. Are you a member of the Better Business Bureau (BBB)?  If not you can immediately discard the company regardless of what they say.  If they are a member visit www.bbb.org to search for the business listing.  Make sure that all outstanding complaints, if any, have been resolved.
4. Can you do business in my state of residence?
5. Can you reach settlements with my creditors?  Provide the company a list of your creditors with the respective balances.  Make sure they have a history of settling with your particular creditors.  Tell them your story.   Provide a little background as to how the debt accrued.
6. What is the total cost of the program including fees?  This figure should be somewhere around 60% of your current debt amount.
7. How much are your fees and how are they assessed?  The answer you should be looking for is somewhere between 15 - 20% and the fees should be fixed.  If there are “administrative”, “retainer”, “variable”, or other fees involved, or if the company cannot quote you a figure for fees then this might be a red flag.
8. What are your hours of business and who can I contact if I have a question regarding my account?  The rep you speak with on the phone with may not ultimately be the person you have to deal with if you have an issue.  Strong customer service is the cornerstone of a successful debt settlement company.
9. What is your web address (URL)?  The company website can provide a wealth of information as to the legitimacy of the business.  Make sure they list a physical address under the “contact us/about us” page.  Look around for fresh content.  Make sure the site is copyrighted for the current year.  Make sure there are no discrepancies between the messages on the website and what the representative on the phone tells you.
10. Ask a couple tough questions and guage the response.  For example, “can my creditors sue me”, “will they continue to call me”, and “will my credit score go down”?  The answer to all these questions is “yes” so make sure the representative does a good job explaining why.

Related Posts

• No Related Post