Debt Settlement Company Advice

When searching for debt relief, many people turn to debt settlement. Debt settlement is the process of reducing unsecured debt through negotiations with the creditors. Debt settlement companies act as the representative of your accounts and negotiate with the creditors until a payoff amount is agreed upon by all parties. Debt settlement offers consumers a way to become financially secure again without having to file for bankruptcy.

Prior to signing a contract for debt relief services, make sure you understand the company policy regarding the following items:

Account Activity

Is the settlement company interested in your recent account activities? Many debt negotiations are hinged on the fact that you have been suffering financial hardships for an extended period. If the recent account activity shows recent cash withdrawals, money transfers or large purchases, the creditor may not want to negotiate. The settlement company should have an active interest in your account history if they are to accurately represent you to your creditors.

Account Omissions

Are you being encouraged to leave accounts out of the settlement process that are unsecured debts? This can be very damaging to your settlement agreements. Creditors will see that some accounts remain current while theirs is not and decide that you can afford all your debts. Any settlement company that encourages this type of behavior does not have the best interest of the client in mind.

Extended Repayment Programs

Any companies that encourage repayment programs which take 3 or more years to complete do not have your best interest in mind. Statistics have shown that the longer the repayment period, the higher chance that it will not be completed.

Explanation Of Down Side To Settlement Programs

There are some drawbacks to debt settlement, and any company that does not fully disclose this information is not a company you will wish to use. While the benefits of the program far outweigh any negative effects the settlement will have on your credit score, the fact remains there will be effects, and they should be disclosed.

Finding a debt settlement company that meets these requirements is quite simple. Having the knowledge on what to look for in a settlement company, and what to avoid will allow you to make a choice that will benefit you greatly.