How to Choose a Debt Settlement Company

So how do you choose which debt settlement company?

If you decide that debt settlement is right for you, how do you choose out of the many organizations offering this service? There have been many new companies springing up in the last few years offering this type of service, some good and some bad. So how do you go about finding a company that is going to provide good, personal service and abide by honest business practices? Here are just a few questions to ask.

1. Do they have Certified Debt Negotiators and Debt Consultants and do they ask questions about your current debt situation and do they review your budget? Does the company have certified debt arbitrators handling your settlement? If not you may not get the results they claim. Does the company you are talking to ask you relevant (and basic) information such as what credit card companies you have debts with, how much you owe to each bank or credit card company, what state you live in, do you have any recent balance transfers or cash advances? This makes a big difference to a company's ability to help you. If they just give you an estimate without asking these questions, beware. Compare them to ADS's experience.
   • American Debt Services Debt Negotiators and Debt Consultants are certified through the International Association of Professional Debt Arbitrators.
2. Are they a BSI Accredited TASC (The Association of Settlement Companies) company? American Debt Services is a TASC "Best Practices Accredited" organization is a company that has been assessed against nationally recognized standards and operates with the highest level of quality, service and integrity — further ensuring that the company you choose is able to help during your critical time of need. TASC accreditation provides a level of security to consumers that the certificates issued are credible, impartial and well deserved. TASC accreditation reduces risk to consumers and gives overall confidence because the member company has been independently evaluated by a third party for its competence and performance capabilities.
3. Are they a member of TASC (The Association of Settlement Companies)? Members of TASC are required to meet certain guidelines; such as proper disclosures, client acceptance standards, and proper business practices. TASC's goals are to promote good practice in the debt settlement industry, protect the interests of consumer debtors, and lobby on behalf of debt settlement companies for regulation that provides both consumer protection and consumer options.
4. Do they make proper disclosures about a Debt Settlement program?
   Such as:
   • Do you fully understand the fee and payment structure that was presented to?
   • Do you understand that American Debt Services is not a law firm and that American Debt Services, nor any of its officers, employees or agents can provide legal advice?
   • Do you understand that American Debt Services does not manage your personal savings account that will be used for settlement purposes nor do we make payments to creditors on your behalf?
   • Do you understand that a settlement program may have an adverse affect on your Credit Report?
   • Do you understand that American Debt Services cannot stop a creditor from charging interest on your account?
   • Do you understand that under certain circumstances, money saved during the debt settlement process could be considered taxable?
5. How Long Is Their Program and what settlement percentages are they claiming? You should ask the questions: "Does it matter how long it takes me to get through the program?" and "Will there be potential problems if the program goes on for a long time?" You need to be aware that going in a extended program which can potentially create legal problems, increase costs and increase the risk you will resort to filing for bankruptcy. Most programs offered by American Debt Services are 36 months or less. American Debt Services does not offer programs exceeding 48 months. Some companies pay no regard to this and push you to get started so they can collect monthly fees. Although some companies seemingly charge lower monthly fees, they compensate for this by stretching out the length of the program, so that over time, you pay the same amount or more than you would have in a shorter program.
6. Do they front load their fees? Most companies have a set up fee or an enrollment fee; this should be expected but you should definitely be aware of the amount of up front fees a company wants. Up front fees are considered collecting all fees with in the first few months of the program. It is recommended that you find a company that at least spreads your fees out over half the length of the program, but no less than 15 months if you are in a 36 month program.
7. What is the difference Between a Flat Fee Program and a Performance Based Program? Performance based fees are usually more costly and uncertain. Performance based plans may charge between 20 - 30% of the debt. With a flat fee structure that American Debt Services offers you know what you are going to pay and the client is typically more committed to finishing a program because they have made an investment in getting results.
8. Who Looks After Your Savings? Some companies hold your savings in a trust account requiring you to hand over control of your money. The safer practice is to establish a savings account through a 3rd party provider such as Global Client Solutions or NoteWorld. This type of account is owned and controlled by you and helps you maintain the discipline to meet your savings goals while offering protection from creditors. Self saving programs where the individual sets aside savings in his or her own bank account also work, but they require greater personal self discipline.
   • At American Debt Services, a third party account is usually set up for your savings, but you retain control of this savings account and only you can approve payments out of the account. You also authorize every settlement before it is finalized. Thus, nothing is done without your approval.
9. Are they a member of a Business Association, Chamber of Commerce, or recognized by Dunn & Bradstreet? There are many new companies starting up in debt settlement. Make sure they have ties to the community that they live in by being a part of a local or state business association.
10. Do They Accept Credit Card Payments? Does the company accept credit card payments for their fees? If they do this, it is both ethically and legally improper. Why would a creditor negotiate on a debt that has just been put on there by the company that's negotiating the debt?