subject: Debt Management - What Consumers Need to Know About Debt Settlement Programs [print this page] Managing debt has given a hard time to people during recession. The situation is not the same as it used to be earlier, when people could rely on their source of income and keep paying the debt. Debt settlement program follows a set of process to eliminate or reduce your debt. These set of rules and processes are flexible, it varies from person to person depending on their financial condition, it is unique for every client.
Consumers need to understand certain basic functionalities about the debt settlement companies to instill their confidence and take up the right program. Don't rush into joining a debt settlement company for debt relief, but get the complete information. These firms do not provide service free of cost, so being a customer it is your legal right to understand their process, the terms and conditions before signing up for a program.
Get a written document of all terms and conditions, especially their fees structure. Normally this should not exceed 15% of the forgiven amount after negotiation.
Try to obtain complete information about the competency of the person handling your debt, weather he is qualified or certified by IAPDA to practice debt management and his experience in this area. Make sure the company website carries a BBB accreditation and is listed on the website of Better Business Bureau. It should possess the legal rights to practice trade in your state. Check for disputes if any, related to the company on the website of TASC or USOBA.
Once you enroll for a debt settlement program, you will be advised to stop making payments to the credit card company. You would need to deposit this amount to an established trusted account. Ideally you will be given 24 hr complete access to this account.
Make sure this time lag in payment does not affect your credit score and invite threatening from creditors; the debt settlement company should take the responsibility of handling the legal complications related to lenders and collection agencies.
The debt settlement company will start negotiating with the creditor once sufficient amount is accumulated in the trusted account. This amount and the time period are to ignite the negotiations and the creditors will be willing to engage into a discussion.
Once the credit card company agrees, they should provide a written document to relieve you off the debt or stating "paid-in-full". Your savings from the trusted account is then channelized to the creditors and you can get a debt free life in less than 3years.
For the millions of Americans who are at least $10 k in unsecured debt, it would be financially prudent to consider the debt settlement option. Creditors are very worried about collecting their debts and legitimate debt settlement companies know exactly what methods to use to get your creditors to agree to eliminate a certain percentage of your unsecured debt.
Debt Management - What Consumers Need to Know About Debt Settlement Programs
