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Finding The Right Debt Settlement Company

Updated on August 26, 2015

Not sure how to deal with the overwhelming effects of too much credit card debt, then debt settlement might be the answer you’re looking for.

My name is Joe Sellers and I have been helping people that are in debt for a long time and understand the effects it has on people's lives. When you have a lot of debt and feel that the situation is out of control, you need to make a decision and make it quick.

The best thing to do is not to put it off until it is too late. You have to realize it is time to start dealing with your debt so you can move forward and put this behind you. As most of you already know the credit card companies are not very helpful when you contact them with an issue. It's pretty interesting the way it works because when you first get the card or are signing up they are the politest people on the phone.

Then if you call to dispute a late or over limit fee and try to get it removed they might let you off with one a year, if you are lucky. When it comes down to it what choice do you have? It's not like you can stop paying your rent/mortgage or other necessities for your family to survive.

The credit card companies made over 17 billion dollars in penalty fees in 2007 and it will be a lot higher this year. Now I am sure if it has happened to you, where you go and open your credit card statement only to find out that your interest has almost tripled.

It is bad enough trying to keep up with 9.9% or even the 7.9 % interest that they are charging on your cards. How are you supposed to afford the new payments now? It was hard enough to pay before they raised the interest.

This is why many Americans are looking for other options such as debt settlement vs. credit counseling, or bankruptcy. If you are not familiar with these three options then I will tell you a little about them.

Bankruptcy

Up until late 2004 bankruptcy was supposed to be used for people who were having serious financial problems. Unfortunately it was abused by thousands of people who wanted to get out of paying their debts without taking responsibility for their actions.

The banks were fed up with this so they pushed to have the laws changed. So under the new Bankruptcy Abuse Prevention and Consumer Protection act of 2005 it would make it difficult for many Americans to file for it.

Bankruptcy should only be considered as your very last resort, only after you have tried every conceivable option. Also you should think of the consequences that could come back later down the road.

You would have to hire an attorney, go to court and that could cost you a substantial amount of money. There is also the matter of it being on your credit report for a long time.

When you sign any important application or document you will always have to answer yes when asked the question about bankruptcy, so this does have a long lasting effect on your credit.

Credit counseling

Everywhere you turn, either on TV or the radio, you hear about credit counseling. A credit counseling company will attempt to get the creditors to lower the interest on your credit cards.

You then make one monthly payment to the credit counseling agency and they then pay each one of your creditors for you. The drawback to this option is even though they lower your interest on your accounts you will still pay back about 120% of what you actually owe.

This is because on this program you will still be paying back what you owe plus some of the interest for 4 to 6 years. Another downfall to credit counseling is that if you have a cash flow problem and are short on your monthly payment they will kick you off the program immediately.

They will also raise your interest back up and the creditors will not let you back on for at least one year. This will put you right back to where you started from if not in a worse situation.

Debt Settlement

This is the option where you will save the most amount of money. A good credit card debt settlement company will save you at least 40% of what you actually owe. The 40% should include all the fees as well.

The same with credit counseling you will hear tons of radio and television ads. These companies are popping up everywhere across America. Some of these companies try to make it sound like they have a magic wand and are going to make all your debt disappear overnight.

There are even some companies that try to use religion to gain the trust of people. No matter what company you choose it is your responsibility to do research on them. You can start with the BBB (Better Business bureau).

You will be able to find out a lot about a company from them. If you see that a company has only been in business for a short time and has a lot of complaints against them, then you know to stay away.

Another thing to look for is how long has the company been around. Some companies only last a couple of years before they get shut down or get caught with their hands in the cookie jar. Then some of them only stay around to make as much as possible and close down just to open under a new company name and will continue to this over and over again.

You need to feel comfortable with the person you are speaking with and also the debt settlement company. If they are really pushy and are trying to get you to sign a contract within the first 15 minutes of the call you need to watch out. In some cases if you tell them you need to discuss it with your spouse first they will still try to push you to make a decision by telling you that it has to be made right now or they can't help you.

This is not a decision you want to rush into head first. Really, how can a company really know they can help you without reviewing all of your information first? There are a lot of companies that only tell you all the good things about their program and tell you not to worry about a thing.

This is a very simple process and nothing bad can ever happen. That is a load of you know what. It is not a very simple process and it is not right for everyone. Some people still get taken by them because that company sugar coated everything and did not fully disclose the entire debt negotiations process.

I will tell you this, for some people debt settlement can really get you back on track and out of debt in three years or less, while saving you thousands of dollars off what you owe. Another thing you must do is check out any company you are dealing with by going to the B.B.B. (Better Business Bureau) to see if they are a reputable debt settlement company.

Make sure they answer all your questions about debt settlement and ask to see some of the letters from the creditors on some of their recent settlements so can see for yourself what they can do for you. I hope this has given you a better understanding of the different options you have on becoming debt free.


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    • profile image

      Ginny Crandall 

      6 years ago

      Thank you so much for this sage advice! I have heard of many good companies, including http://helpwithdebtrelief.net , but I think that you are right. Each person needs to research the company for themselves to know which is right for them. Debt relief is essential for many people right now, and they need to know exactly what is going to happen in that process. This can only happen if they have done their research.

    • profile image

      debt arbitration 

      8 years ago

      It's a good thing that I came across your blog I'm sure this post would be a big help for those people who’s really having a hard time finding the right Debt Settlement Company.

    • profile image

      MattSmalls 

      8 years ago

      Debt settlement programs will negotiate with the creditors and reduce your debts to the lowest amount as possible. They would get all the relief that you need.

    • profile image

      thedebtman 

      8 years ago

      This blog offers good advice about how to choose the right debt settlement company

      http://www.thedebtman.blogspot.com

    • profile image

      Ruby 

      8 years ago

      Any of these credit card debt settlement methods are fine, as long as they work for you and help you get debt-free quickly.

      If you go for credit card debt settlement all by yourself, you will need to analyse the various options available to you

      such as researching various balance transfer offers available, checking the loan options with the banks.

      However, if you want to take credit card debt settlement advice from a professional, you should be able to trust the advisor

      fully. So you need to check the credentials of the credit card debt settlement advisor/company.

      There are hordes of people and companies that advertise "credit card debt settlement in one day" which will appear incredible.

      Such credit card offers are generally not genuine.

      You need to understand that credit card debt settlement cannot happen overnight.

      So, beware of such agencies. That said it's important to mention that there are a lot of good credit card debt settlement advisors / companies available

      such as http://debtcolutioncenters.com who will not only give you genuine credit card debt settlement advice but will help you throughout until you are finally out of debt.

      Their advice may, in fact, more than compensate for the fee that they charge you for credit card debt settlement.

      These credit card debt settlement companies / advisors will be able to help you in the best way if you tell them your current financial situation correctly.

      Your future plans are important too, as they might influence the decision on 'What route for credit card debt settlement would work the best for you'.

      Once you are done with your credit card debt settlement, you should also take measures to avoid falling into serious debt again.

    • profile image

      Andie M. 

      9 years ago

      American debt settlement and debt consolidation are the most sought-after services today and it is always important to know the right information and steps when dealing with your personal finance and problems on it.

      http://www.articleinsider.com/finance/debt-managem...

    • profile image

      Karen F. 

      9 years ago

      Joe, have you heard of a company called DebtShield? Which company would you recommend for Debt Settlement? What if the company is not a member of the BBB?

      Thanks

    • profile image

      nomad79 

      9 years ago

      Hey Joe, as always you give really good advice to people and I know that I have learned a lot from your hubs. Thanks again

    • profile image

      Emily 

      9 years ago

      Nice tips to choose a good company which will help you. Debt settlement does help you in reducing your debt levels to a great extent. I took help of Freedom Debt Relief to settle all my debts. Its been more than a year that I enrolled into their program and now I am almost debt free. http://www.freedomdebtrelief.com/debtreduction.php

    • Lgali profile image

      Lgali 

      9 years ago

      good advice again

    • profile image

      john 

      9 years ago

      Debt settlement is a great way to go, and you can do it yourself. But if you do, be prepared! You need to follow a timeline, and be prepared to be hounded by creditors on the phone and via the mail.

    • profile image

      Lin 

      10 years ago

      Good advice for people to take heed of in this day and age when overextending is an an all time high. I hope everyone who reads this will save the article and heed your words because the future won't be getting better for a while.

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