Finance

Choosing a debt relief company

In every industry there is always a chance for a “bad” element. Debt relief is not exempt from these figures. Anytime there is a service available that will greatly help the recipients, there is risk that a company will crop up that will take advantage of these same people.

Many consumers have heard the horror stories about debt companies taking advantage of people that are already suffering financially. These same people then fail to use these services, even when they really need them, out of fear.

It should be noted, however, that there have been many laws put into place that have weeded out these companies. Beyond the legal issues, consumers can easily spot deceptive businesses by using the following guidelines:

• Companies that request you claim all your debt, even secured loans should be avoided. Credit card and other unsecured debt should all be included in a settlement program, but secured loans often have much better terms and should remain out of the program.

• Companies that promise very low debt pay-off amounts. There are no guarantees with debt relief programs. Some creditors will absolve 90% of your debt while others may only reduce your debt by 5%. Any company offering a guarantee is not on the level.

• Companies that are unconcerned with how you became financially distressed. How can a debt negotiation take place with your creditors if they have no information to use?

• Companies that pre-qualify you for their program. Debt resolution should not be based on your ability to obtain more credit, it should be based on your need for help.

Of course, the first place you should start your investigation about any debt company is at the Better Business Bureau. Other consumer review sites may also help, but many times biased opinions are loaded on the sites in an effort to make the company look good or bad for other-than-honest reasons. All opinions on these sites should be viewed with caution.