What Should Consumers Ask Their Debt Settlement Companies?

While most debt settlement companies need be both competent and successful in order to stay in business – word of mouth being such an important quality for any new industry – there exist, of course, those firms with less experience and lower ethics. Here are a few methods to pay special attention to when first encountering a debt settlement company.

Essentially, no matter how trustworthy and competent the debt settlement professional may seem (or, in fact, no matter how trustworthy and competent they may be), nobody wants to be a young negotiator’s test case. Experience is so important, and there’s simply a limit to the effectiveness of any debt specialist just starting out. Determining this is as easy as asking how many clients the negotiators have helped; anything under a few dozen should be judged with all due suspicion. Everyone has to begin somewhere, but let another borrower try their hand with the new kids on the block.

Of course, this is somewhat an unfair question. The amount of settlement possible will change with every borrower. All situations and all borrowers are different, after all, and there’s no way for a professional negotiator to know precisely how much can be saved without looking through the borrowers’ finances and discussing practicalities with the lenders. At the same point, though, it’s good to get an idea what they’ll be striving for. As you’d expect, all companies have different expectations as to the amount of debt that could be eliminated.

Once again, there’s no good answer for this without a complete understanding of all the borrowers’ past credit dealings and a thorough discussion with the creditors to get an impression of what they’re willing to allow. This is a bit different from debt elimination, however. Remember, not all moneys owed will be done away with and the remaining balances are subject to payment plans. While each specialist should attempt to garner the longest payment schedule and lowest interest rate, many of them sacrifice such points to negotiate a greater debt reduction. Cutting balances may be the most showy part of the settlement process (and, to be sure, the aspect most coveted by borrowers), but, should the borrowers find themselves unable to complete repayment due to outrageous interest rates, they’ll be in rather a worse position than if they’d done nothing at all.

As with most of these questions, one can’t ever depend upon the impressions given by initial consultations. There’s a string of debtors who’ve been fooled by charming debt professionals whom, after making sure their clients have signed on for their services, barely worked on their behalf – with predictable consequences as to interest rates assessed and debt balances reduced. One good way to ascertain the level of responsibility each company feels toward their clients is to determine their support infrastructure. How many people do they have manning call centers? Are they available for questions at all hours and on weekends? Remember, debt settlement can affect the borrowers’ lives for years. It’s entirely reasonable that borrowers will have questions at all hours, and, should debt settlement companies ignore that aspect of their clients’ needs, who knows what else they’ll avoid.

To be sure, just because the company has maintained membership in any organization, there’s still no guarantee of trustworthiness, but one has to wonder about any firm that has avoided such. The Association of Settlement Corporation, in particular, has an excellent reputation within the industry and seeks to promote top levels of competence and respectability for debt settlement companies on a local and national basis. As well, it never hurts for a company to be associated with the Better Business Bureau or their regional chamber of commerce.

How to Ensure Debt Settlement Success

Unfortunately, the only sorts of debts that can be successfully eliminated through settlement are those not secured to property. These unsecured loans – credit cards, primarily – allow the debt settlement specialist great leverage with which to negotiate a reduction in debt balances with bankruptcy as the unspoken threat against creditor resistance. However, when debts are tied to, say, homes or vehicles (as with mortgages or car loans) that could be foreclosed upon or repossessed, there’s no leverage whatsoever. Repayment schedules may still be arranged – often with lowered interest rates – however there’s no likelihood of debt elimination for secured loans regardless of the debt settlement company’s talents or experience.