A question that I am asked quite often is, “who is the best debt settlement company?” Well, that really depends on what your definition of “the best” is. Personally I have not seen more than a small handful that I would even consider recommending to a consumer. Most of these debt settlement outfits have less than a 25% success rate and will do nothing more but siphon fees from consumers before ultimately pushing them into Bankruptcy.
WARNING – Do not even consider working with a Debt Settlement Company until you know if Debt Settlement is the right solution to your current financial situation. Determining the best strategy for you first, is the most important step that unfortunately most consumers skip over. You should not call a debt settlement company salesman and ask if you should proceed with a debt settlement plan. This would be akin to asking a car salesman if you should buy a new car. Make sure to speak with a qualified financial professional that will review your Overall situation and help you determine the best financial strategy. If you determine that settlement is the best option, and you want professional assistance, then you should call numerous debt settlement companies looking for the one that has the best debt settlement program for you.
Here are the major points that you should compare:
1. Fees – This is by far the biggest reason I would never even consider 99% of the debt settlement companies in existence. The industry standard fee structure is 15% of a clients debt charged over the first 14 months. This is a ridiculously bad deal for a consumer. First it can be a very large amount of money if you have a high debt load. Second, you have to pay the entire fee before you can settle your debts, dangerously extending the time in which you are not paying your creditor. Third, they make the same amount of money regardless of whether or not they do a good job for the consumer.
Look for a company that charges a fee based on the amount of money that they actually save you. That way you know they are going to get you the best deals that they can. These companies are more difficult to find because they charge much less money and therefore spend much less on advertising. However, the extra time spent locating a performance based fee company will save you thousands of dollars in fees and will be time well spent.
2. Experience – Does the company that you are talking to actually have any experience or a track record performing the service that you are hiring them to perform? Did they just open their doors a few months ago or have they been helping consumers for at least a few years? Can they show you proof of actual settlements they have performed for past clients?
3. BBB Record – I have mixed feelings about this as the BBB is not an impartial entity, however they are a forum where consumers can report dissatisfaction with a specific company. When it comes to debt settlement, I do not put much stock in the letter grading of the BBB as they have publicly admitted their bias toward the settlement industry as a whole and their letter grades reflect that. However, you should look at the BBB to see if there are any actual complaints against a specific company. Feedback from current and past clients is what you are really after here. So make sure any company that you are considering doesn’t have a large amount of unresolved complaints from consumers.
4. Customer Service – This is a very big issue and should not be glossed over. When you are in debt, you can’t pay your bills, you are getting nasty calls from creditors and are losing sleep at night, you want to be able to pick up the phone and talk to a knowledgeable person about your situation. The last thing you want to do is work with a company that will not return your phone calls or simply treats you like a number.
Customer service should be a number 1 priority and you want to find a company that doesn’t have a client load that all but guarantees you will not be given personal attention. When it comes to you and your specific situation, bigger is not necessarily better. Make sure you will get the personal attention you deserve.
5. Consultation/Sales – This ties into the warning at the top. You should not really be speaking with a debt settlement salesman until you already have a pretty good idea about whether or not the concept of debt settlement is something that makes sense for you. That being said, is the company providing you with a consultation or a sales pitch? A consultation would be taking the time to gather all of the facts about your situation, understanding what you are trying to accomplish and educating you about what debt settlement is, and how it would affect you. A sales pitch is more along the lines of, “oh you have debt? Well we have the best program available, let me tell you why you should sign up.”
6. Attorney vs non attorney – Some consumers feel more comfortable working with an attorney. Unfortunately many companies know that and exploit it. Do you need an attorney to negotiate your debt with your creditors? In short No. When it comes to settling your debts, there is not much an attorney can do for you that a non attorney could not. Many of the so call Attorney settlement companies are simply that in name only. Typically they may just have an attorney on staff but the attorney is not actually doing the negotiating or any of the day to day duties. One thing you can count on is paying through the nose for one of these Attorney settlement companies.
Some consumers have a fear of getting sued and therefore would rather pay the excessive fees in exchange for the comfort of knowing they are represented by an attorney. Here again, make sure to read the fine print. In most cases you will discover that the hefty fees you are paying are not for legal representation. Meaning you are not contracting with them to represent you in court. So you are paying hefty fees without getting any actual advantage. So make sure to read the fine print, and understand what you are paying for.
These 6 categories will give you a good jumping off point for helping you to determine the best debt settlement company for you. With hundreds of companies out there, make sure to take your time and select the one that best fits your needs. Don’t allow yourself to get rushed into any decisions. It is better and cheaper to take your time and make the right decision up front then to try and correct a wrong decision down the road.