How To Choose A Debt Settlement Company
Choosing a Debt Settlement Company is an important decision. There's too many companies trying to sign up as many people as possible and will often hire slick commissioned sales agents to make the deal.
If you need a credit card debt relief program, you're probably asking yourself... How do I choose a Debt Settlement Company? Well, to get through the slick commissioned salesman you need to get the answers to the following questions.
11 Questions To Ask A Debt Settlement Company:
- Does the Company charge any fees prior to reducing your debt?
- How does the Debt Settlement Company Charge its fee?
- Are There Any Monthly Fees or "Maintenance Fees"?
- Does the Company Have Many Client Complaints?
- Is the Debt Settlement Company A Member of TASC (The Association of Debt Settlement Companies)?
- Are they Members of the International Association of Professional Debt Arbitrators?
- How Long Is the Right-of-Recission Period For the Debt Settlement Company?
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Did the Company Explain How the Program Works and Consultant You On All Your Options?
Before enrolling into a Debt Settlement Program, consumers should be fully aware of how a debt settlement program works. The consultation should have also included other possible options available to you including filing for bankruptcy, credit card debt consolidation and credit card counseling services.
- Are You Dealing With A Full Service Debt Settlement Company?
- Does the Debt Settlement Company offer a Service Fee Money Back Guarantee?
- Will you have online access for your account to view and track your progress?
- Recent Activity & Progress
- Settlement Offers Made & Received from Creditors
- View Enrolled Accounts
- Update Personal Contact Information
- Send Requests Directly to the Client Care Department
This is the most important question, which is why it's number 1. You should not enroll with a debt settlement company that has any type of fee prior to reducing or settling your credit card debt.
First Choice Debt Relief is a true Performance Based Debt Settlement Company that has $0 fees until we reduce your credit card debt.
ALERT! There are many companies trying to justify charging you an upfront fee by saying they are an "Attorney Based Debt Settlement Company". In a vast majority of cases, they're trying to get around your state law & charge you a higher fee. The sales people at these companies are really good!
We don't think an attorney is necessary to settle your credit card debt, but if you're already sold on the idea be sure to use one that doesn't have any fees prior to reducing your debt.
Most Credit Card Debt Settlement Companies charge you a flat fee of the debt amount you enroll. For example, a 20% Flat Fee works like this:
Your Original Debt $10,000.
Service Fee: 20% (10,000 x .20)
= $2,000 Total Fee
Now, if the company can negotiate your debt significantly than the fee isn't so bad. The company performed the work and they need to make an honest profit. However, the disadvantage of a Flat Fee is that if they save you very little money the fee isn't going to change. If like in the above example your debt is settled for $8,000 and you add the $2,000 fee, you didn't really save much.
With a Flat Fee a debt settlement company may not be as motivated to negotiate the lowest possible settlement, rather get you the quickest possible reduction so they can collect their fee quickly.
On the flip side, there is the Savings Based Debt Settlement Program. This is where the fee is a based on a percentage of what you save. Normally, the percentage number (Ex. 205 or 20%) is higher than the flat fee, but don't be fooled into thinking you're paying a higher dollar amount. The percentage is higher because your savings on the debt is a lower number than the amount you enroll in.
A savings based fee structure is going to put a lot of accountability in the debt settlement company to manage your account wisely.
And of course, First Choice Debt Relief is so confident in saving you money that we use a Savings Based approach.
This goes right back to question number 1. No Fees Prior to Settlement means No Fees Prior to Settlement. End of story.
ANOTHER ALERT! The name of the fee is changing almost daily. It ranges anywhere from Maintenance Fees to Legal Administration Fees. Best Tip: If there are any types of fees prior to you getting your debt reduced, don't do it!
First Choice doesn't have any of these wacky fees.
(Most programs will have a Special Purpose Account or Trust Account Fee. It usually ranges anywhere from $8-10 a month. This is normal and not part of the debt settlement company fee)
A simple search on the internet for the company name will usually give you an idea of how they treat their clients. You can also do a quick search on the Better Business Bureau and see how many complaints the company has against them. If they have a lot of complaints compared to the time they have been in business, stay away!
First Choice Debt Relief is committed to giving each and every client the best possible service and support. Our records speak for themselves! We are an Industry Leader in Customer Service because we focus on each individual’s clients needs as opposed to "signing up more and more." Our philosophy is treat clients the way you would want to be treated.
You can check out our A Rating on the BBB and see for yourself. We've worked very hard to keep our clients satisfied.
The Association of Debt Settlement Companies focuses on promoting good practices in the debt settlement industry & protecting the interest of consumer debtors. Members of TASC must follow by a strict set of guidelines that include proper disclosure for consumers and maintaining practices to maximize consumer experience and completion rates.
If a company is a member of TASC, you can rest assure they are committed to Debt Settlement for the long term. First Choice Debt Relief is a TASC Debt Settlement Company Member.
Companies who are Members of the International Association of Professional Debt Arbitrators have passed through a certification and training process. This certification program requires that the participants review course material relating to the Fair Debt Collection Practices Act, Budget Analysis, Negotiating Techniques and Proper Communication with Creditors.
First Choice Debt Relief is a certified member of the International Association of Professional Debt Arbitrators. We are committed to providing our clients with the highest possible service and this can only be achieved by providing our staff with up-to-date training.
A Right-of-rescission is your right to cancel the agreement after signing it for a short period of time. It is usually in place to give customers the chance to look over the paperwork for a final time, ask any additional questions they may not have been sure about and "sleep on it".
For example, let's say you fill out the agreement on January 1st and have a 3 day rescission period. You could cancel your agreement up until the 3rd day, which would be January 4th, usually without any penalties or cancellation fees.
Most companies provide for a 3 or 5 day rescission period. First Choice Debt Relief provides for a 30 day rescission period which is one of the longest periods in the industry. If a company is offering you a short rescission period, they may be too concerned with rushing clients into the program. In fact, you can cancel our program at any time without any fees or penalties.
A Full Service Debt Settlement Company will handle all aspects of your file from consulting, to negotiating and client support. However, a huge majority of companies are merely signing up clients and then sending it over to a completely different company who handles the negotiations and customer service. (HINT: These are usually companies who claim they are law firms or affiliated with a law firm. You'll know very quickly once you ask directly.)
Typically, the company enrolling clients and the company signing up clients are hundreds or even thousands of miles apart! On top of that, the company who is servicing the clients has so many people enrolled that many people get neglected. You'll be most likely hearing hold music for a very long time.
A Debt Settlement Company should be confident in the services they provide. If the company is focused on enrolling more and more people, they'll likely have little confidence.
We're so confident in our services that we offer each client a Service Fee Money-Back Guarantee. If we can't get you out of debt for less than what you enrolled in (including our service fees), then we'll refund the difference.
Debt Settlement Companies should provide each client with transparency in the status of their accounts and the work performed on their behalf. In most cases, debt settlement companies are "Mom & Pop" type organizations that don't have the resources to be able to provide clients with this type of access.
First Choice Debt Relief provides all clients with online account access 24 hours a day, 7 days a week. Clients can track and view:
If you are a current client and would like to access your account, you can visit here. If you do not have or remember your account log-in information, contact Client Care Department.
A Debt Settlement Program can be very effective if it's structured properly and someone is managing it wisely. Take these 11 questions and try a First Choice representative to see what you think! (877) 956-1500
