By TASC staff and members
For many consumers, sorting through the numerous variations of settlement and negotiation services offered by literally hundreds of companies nationwide can sometimes be a challenge. While there are many reputable companies offering legitimate settlement services, there are areas you should consider when choosing a company that’s best for you. To help you in your search, the following questions are excellent guides to keep in mind when evaluating a trustworthy company, who can provide the best help for your particular situation.
Are they a member of a national industry trade association or other accreditation agency?
This is one of the most important items to consider when choosing a company to work on your behalf. Many settlement companies today operate independently and without a system of checks and balances. Since many states have few requirements for settlement companies to follow, be certain to look for a company who holds themselves accountable to industry standards maintained through an industry accreditation process.
Insurance and Bonds
Is the company insured and bonded?
Since debt negotiation clients will be sharing sensitive information including creditor account and social security numbers it is strongly recommended the debt settlement company be bonded and insured against identity and financial theft.
Does the debt settlement company hold client settlement monies?
Debt settlement companies should never offer to hold your money in a trust account controlled by the company. Instead, the monies saved for future negotiation should either be in the consumer’s own private savings account or in a third party bank FDIC insured account. You should always maintain direct control of the money
Does the contract include the required disclosures and is the total amount to be paid as specified in the contract less than the amount of debt enrolled into the program?
Debt settlement companies are required to deliver a written contract describing the services they will perform and a best estimate of costs. The contract should be easy to read, include the disclosures mentioned later in this document and you (the client) should never be required to pay more than 100% of what you owed which includes the fees to the company.
What can you tell me about the quality of your customer service?
The settlement process can take between two to four years to be completed. This is a trying period for the consumer faced with aggressive creditors. A solid relationship with clear communications directly with the company is instrumental to completing the program successfully and stress free. Ask about customer service training, hours of operation and any affiliation or awards the company might have earned.
Access to your Account
How does the company let me know about the status of my account?
Legitimate Debt Settlement companies should have an online “client center” so current clients can view their account information at any time or be sent monthly statements on a timely basis.
Full Service Company
Why should I contract with your company?
There are many debt negotiation business models but the company should have some affiliation in the city they reside in either through the chamber of commerce or any other professional organization.
What to you do to help with aggressive creditors?
Debt Negotiation clients are likely to experience aggressive creditors using threatening collections tactics. Consumers should require that either the creditors be notified through a “ceased and desist” letter or that a creditor harassment service be included with their debt settlement program.
Do you provide any educational services or materials?
Debt Negotiation is not just about saving money and becoming debt free. It is about learning proper financial management so that the consumer is not faced with the same financial situation in the future. Debt Settlement Companies should be offering financial education services either through online education, print or in class training.
What to listen and look for in contract disclosures when dealing with a Debt Settlement company:
Not paying your credit card bills
Debt settlement companies will never ask you to or tell you to stop paying your credit card minimums. It has to be your decision and choice to honor your obligations to your creditors through the debt settlement process.
One of the strongest benefits of Debt Settlement is that it is a way for consumers overwhelmed with unsecured debts, like credit card debt, to avoid filing for bankruptcy. An honest debt company will never guarantee that you will not have to file for bankruptcy.
Credit Report Score
Unlike credit counseling or bankruptcy, entering our program is NOT part of your credit report. Your employer, landlord or any other organization who may view your credit report will NOT see that you are in our debt relief program. However, like all debt relief programs your credit rating will be affected. How much your credit is affected depends upon your current credit score.
The average settlement time takes 24-36 months. How quickly a consumer can become debt free depends on a few factors such as how much you currently owe, how much you can afford to save each month and creditor settlement policies. Consumers should target a 2-3 year program and avoid companies that offer programs shorter than 1 year unless special circumstances apply and no longer than 60 months at the longest.
Unlawful and Harassing Creditor calls
Avoid companies who guarantee that ALL creditor calls will stop. Creditors have the right to attempt to collect on the debts owed to them. They are not allowed to harass or threaten you.
Guarantees and Refunds
Guarantees and Refunds can be a sign of reliability or a farce depending on the fine print in these legal documents. You should read all guarantee and refund documents. Use basic logic and stay clear of businesses with 100% guarantees for everything. Debt settlement companies can only guarantee their best efforts and would never guarantee that a creditor will settle a debt at a specific time.
Creditors have the legal right to sue you for non-payment on your debt (although this happens only in few cases). While debt settlement companies should not provide you with legal advice (unless you hired an attorney for that purpose) the company will give you some general information and discuss with you some options that may help you to decide the course of action that is right for your situation.
Any questions… please feel free to send an email to our customer service hotline at firstname.lastname@example.org.