If the debt has become a problem in your life and you’re struggling to make the minimum payments on your financial obligations, some form of debt relief might just be the answer you need.
However, as with any industry in which cash payments are involved, the debt settlement field has its share of nefarious operators. Conducting due diligence research is critical to ensure you find a reputable partner.
To that end, here are some key questions to ask before hiring a debt relief company.
1. How Long Have You Been Doing This?
A lot of fly-by-night organizations jump in to make a quick buck and duck out before the heat becomes unbearable because they’ve fleeced so many people. A reputable firm will have at least five years of experience and can point you to many millions of dollars of settlements they’ve negotiated (billions in some cases). Yes, this makes it difficult for startups to get traction, but there are other measures of veracity to consider as well.
2. What Will This Cost Me?
The law prohibits charging fees until debt settlement firms have negotiated a settlement on your behalf. Any company asking for payment upfront is operating in violation of the regulations governing the industry.
As for overall costs, a solid company will provide an itemized estimate for you to review at your own pace. It should include an approximation of the dollar amount you’ll need to deposit into a special account each month, in addition to a calculation of the settlement fee and how it’s computed. They should also disclose approximately how many months your program will take based upon the amount of debt you have to clear and how much money you can put toward building your settlement fund each month.
3. How Can I Find Other People Who Have Worked with Your Agency?
Sites like HighYa, Trustpilot, Consumer Affairs and Best Company feature reviews of some of the leading organizations operating in this field. Testimonials like these Freedom Debt Relief reviews will give you a good idea of what it’s like to work with a particular company and the degree of success enrollees have been able to achieve in the past.
4. How Many Creditors Have You Worked?
Evasive answers to this question will typically run along the lines of, “Every situation is different, so we add new creditors all the time.”
And, to be fair, there is a degree of plausibility to this response. However, the most experienced firms have worked with just about everyone at some point — and have contacts they can reach immediately.
Further, this is a situation in which you want someone who has long, established relationships with hundreds of creditors. This will have earned them insights with which they can reach the best negotiation outcomes as quickly as possible for you.
5. Are You Licensed in My State?
California, Connecticut, Indiana, and Colorado have certain hurdles debt relief companies must clear to do business. While a number of other states do not, it’s still a useful question to ask — especially if you live in one of the aforementioned ones.
6. What Industry Affiliations Do You Maintain?
The American Fair Credit Council requires its members to adhere to a strict code of standards and ethics. Its members are audited annually to ensure they’re in compliance with them. An AFCC membership is a sign of someone who’s doing things right.
The six questions to ask before hiring a debt relief company will help ensure you’re working with an honest organization. If you’re in a situation in which you need the help of a company like this, choosing carefully can be the difference between solving your problem and making it much worse.