Top 3 Questions to Ask if you are considering working with a debt relief company
84It is now 2019 and consumer-targeted, debt settlement services companies are on the rise. They call you and make all of these promises about being able to fix your credit, renegotiate deals with your creditors, or even remove the account from your credit report altogether. All of this sounds too good to be true, right? It may be. But first you have to do your due diligence and research the company that is reaching out to you, and this is the first major red flag. That should justify you to be just a little bit more suspicious, than if you researched and then reached out to them. The following includes a list of three questions that you should ask yourself before doing business with these guys. Let's go ahead and start the countdown. Ask yourself:
#3. “Can I afford it?”Most of these companies will contract you for expensive fees. Some of them will even charge you a fee for each item removed. This would be especially important if you have more than a few items on your credit report. They will also disguise their fees with a small monthly payment; that way, at the end of your “affordable” payment plan, you can end up spending valuable money that you could have spent settling the debt yourself. Ask yourself if it is worth it to spend all of that money in fees, in order to get your debt resolved. Also be realistic about how much work it may or may not take them to fix your credit, as those fees may or may not be justified.
#2. “Is it too good to be true?”Like the old saying goes, “If it is too good to be true, it probably is.” Some of these companies promise that they are able to settle all of your debt. This is usually not the case, as it is up to the creditor to work with that company to settle your debt. Remember, you are not the one doing the negotiating, and you are likely to have issues if a creditor is not willing to work with the debt settlement company to settle your account. There are also companies that speak of a government bailout program that allows people to settle their debts. This is also usually not the case, as it will be publicized outside of their company actually informing you about it. This is all so easily researchable, so do your research and figure out if what they are saying is true.
#1. “Am I prepared to have legal representation, if needed?”One thing to know here is that opening up a case to have someone represent you goes into legal territory. Remember that these people are not lawyers and cannot substitute as legal representation. Because some of them tell you to cease payment on your current accounts, this may or may not getting you sued by that creditor for non-payment. There may come a time when you will need to get legal assistance to settle the debt that they could not settle, as sometimes they can dig you deeper into a hole with the creditors than if you were to just call them and negotiate on your own behalf.
Careful consideration should be taken when deciding to work with a debt-settlement company. Not 100% of the time, but sometimes they can allow you to end up much deeper in debt, with fees incurred from not paying each account. It might be a good idea to have a clause in your agreement that they inform you in the event that a creditor is unwilling to work with them, so it gives you a chance to note the problem account and try on your own to resolve and negotiate. Ask yourself these three questions, and if you feel secure enough to proceed after, then proceed with caution!