Debt Reduction Services Are They A Scam or Can They Help!
For starters I would like to state up front that this may be a pretty long article, as I would like to fully explain what I mean by the title of this article. I have been in the debt reduction industry for almost a decade now and have a pretty darn good idea of what I am talking about concerning debt reduction services.
Assuming you are American, unless you have been living under a rock, you are well aware of the terrible condition the economy is in. Thus putting many people into very compromising financial positions; one of the biggest problems most people are facing right now is credit card debt. Inevitably putting people into a position where they begin looking for help. After researching the options available to them, many people come to the determination that debt settlement, also known as debt negotiation, would be the best method of debt reduction for their predicament. At this point many people begin to look for a company that can help them out. In this article I am going to explain to you the process of debt settlement and how to determine if a debt settlement company has your best interest at heart.
Debt settlement is a process where negotiations are made on defaulted unsecured debt, to make a one time payment on the balance owed at a much reduced amount than originally was owed. Many folks find themselves saving almost half of what they owe through this process and are debt free within a couple of years.
Now this may sound almost too good to be true. Saving half of what you owe and being out of debt in a couple of years. But I assure you it is not; while the benefits are amazing the process is not the most pleasant in the world. In order for any creditor or collector to be willing to negotiate on your balance owed you must default on the accounts. Only by not paying them will they be willing to negotiate a deal with you.
As you can assume if you are current then the beginning of this process will have a negative effect on your credit, and you will be receiving collections calls. For some people that will steer them away which is quite a shame considering by doing that they will be stuck in debt for the next thirty years. These people will find themselves in debt again and again because instead of proactively trying to get out of debt, they are trying to make sure they can accrue future debts.
Onto where debt reduction services come into play; a competent company will have the skills and knowledge to successfully deal with the collectors on the debtors behalf. With the goal being to obtain a debt settlement for their client; thus saving them a lot of money and enabling them to become debt free very quickly. And in this economic state of affairs getting out of debt ASAP is a very wise financial move.
The vast majority of debt reduction services are not scams; although there are some flat out scammers around there are not many. The problem lies when a company knowingly puts people onto a program they know will not succeed for that person. A company must also give “full disclosure” meaning they fully explain both the advantages and drawbacks. Unfortunately many companies do not offer full disclosure and taint the debt reduction industries reputation.
A common problem many companies run into is when they do not explain to potential clients that they must stop paying there creditors like I mentioned above. So when they begin to receive collection calls they are pretty surprised. As far as collections calls are concerned no company can guarantee all of the calls will be stopped. So if you are speaking with a company that says anything along those lines, be very weary. Many will be able to slow them down to some degree but no one can simply push a button and stop them all.
The next major problem when dealing with debt reduction companies is that many will put people onto a debt reduction program knowing they cannot truly manage the program and will fail. These companies just want to collect your fees and could care less whether you succeed or not. This process should take no more than three years to complete (in some rare situations can be prolonged to four years) in order to maximize the benefits. The scandalous companies will basically accept whatever payment you can make even if it is far to low of an amount to get the process done in the correct amount of time. Like I said all they want is the money and do not care if you compete the program. So if you are speaking to a company that is trying to get you on a plan that is four to five years or more stay away. As much as it may hurt to accept in this case you are better qualified for bankruptcy.
Another very good way to determine if a debt reduction service is an honest reputable company is if they are an accredited member of the BBB (Better Business Bureau) with a good track record. Most companies will have a few complaints, however the good companies will show those complaints have been resolved to the clients liking. Then if you find a company who just has tons of complaints stay away!
If you find yourself sitting on the fence with whether this is a good choice for you then you should really take into consideration what will happen if you don’t. A large number of people can barely even afford their minimums, if you find yourself in that situation imagine that you will be stuck in that same rut for 30 or more years. The monthly minimum payment scheme devised by the creditors is set up to keep you in debt for as long as possible and milk as much money through interest as they can. There’s a reason the minimum payment scheme is referred to as the “credit treadmill”.
Follow what I said above when you interview a company. Make sure they fully disclose to you the whole process and procedure and what to expect. Also be sure to check the BBB and make sure they are in good standing preferably with an A rating.
I highly recommend if you are in a bad debt situation and need a resolution to your situation to follow the link below and fill out an application requesting to speak with a debt analyst to see if something can be done for you.
The debt reduction services I recommend are outstanding have been achieving stellar results for their clients. Do not let yourself get stuck running on the credit treadmill for the next three decades of your life!
-
Mistakes Made By Debt Settlement Lawyers When choosing your debt settlement lawyer, you... Read Full Story »
