It can seem as if reliable debt settlement companies are few and far between, but this isn’t really the case. The industry is tarnished by a few cowboy operators that serve to make life difficult for ethical debt-free solution providers. However, it is essential that you invest sufficient personal time into selecting the most appropriate program for setting credit card debt, medical bills and other unsecured debts.
What is a Debt Settlement Program?
This debt-free solution involves an intermediary negotiating with creditors with the intention of achieving a personal debt reduction of up to 50%. The remaining sum is gradually re-paid over a period of 12 to 36 months. Most debt settlement companies charge a 15% fee for managing this plan. Whilst some take their fee each month, others take full payment in advance (known as front-loading).
Why Should Debt Settlement Companies That Front-Load Fees Be Avoided?
- Creditor litigation. They will take their cut before making payment to those who are owed money. This not only increases the likelihood of creditors becoming frustrated with your debt-free solution, it is likely to mean that they take further legal action to recover any money they are owed.
- Change of plan. If you decide that a debt settlement program is not the right option and pull out, there is a strong possibility that more money will be owed than when starting out. The fees that are charged up-front are added to the amount owed.
The majority of horror stories regarding debt settlement programs occur as a result of the front-loading of management charges. Avoid this problem and settling credit card debt is far more likely to be achieved.
Background Research on Debt Settlement Companies
- Check for any negative feedback that has been registered with the Better Business Bureau. Customers provide feedback in relation to their personal experiences and are able to rate the provider they have dealt with.
- Always deal with the established providers of debt settlement programs. If a company has been operating for several years, there is a higher probability that it operates ethically.
- Ask friends and family if they are able to recommend an appropriate company for settling credit card debt. It is surprising how many people have a personal experience to share.
There are many debt settlement companies; choosing the right provider is fundamental to the success of this debt-free solution. A debt settlement program not only achieves a personal debt reduction, it helps to improve affordability and can get your life back on-track.