Choosing Your Debt Settlement Company
Debt settlement can be one of the fastest and least expensive bankruptcy alternatives, but people do not always understand the process, let alone which debt settlement company to choose. Many consumers confuse debt settlement with other debt relief options like consumer credit counseling, debt management, and debt consolidation. Before choosing a debt settlement company, it is important to understand how debt settlement may be able to get you out of debt.
But once you understand the process, how do you choose the right debt settlement company?
If you think you qualify for debt settlement and you are ready to think about which debt settlement company to work with, here are a few points to consider:
1. Choose a debt settlement company that will put their guarantees in writing.
How valuable is a guarantee if your debt settlement company won’t put it in writing? Here at Debt Shield, we are ready to hold ourselves accountable for the work we provide. We have a Term Guarantee and a Customer Service Guarantee in writing and on our website so that potential clients see the promises we make.
2. Choose a debt settlement company that will explain their settlement rate projections.
Your projected settlement rate should be originally calculated to reflect each of your accounts with each of your creditors. Before committing to a debt settlement company, ask how they calculate their settlement rate projections.
At Debt Shield we base our projections on real, in-house data and records of the success our negotiators have had with various creditors. We specifically tailor projected settlements to each one of our clients’ enrolled accounts. Every Debt Shield client gets a realistic settlement projection before committing to the program.
3. Choose a debt settlement company that has a good standing with the Better Business Bureau.
One of the Better Business Bureau’s (BBB) main services is to help consumers settle disputes with businesses. The bureau serves an important function for consumers who feel they were wrongly treated. You can learn about a debt settlement company’s BBB tract record before committing to their program.
Debt Shield has a good standing with the BBB. Debt Shield has been a BBB Accredited Business since December 2006 and has addressed and resolved the very few complaints filed with the bureau.
4. Choose a debt settlement company that belongs to its local chamber of commerce.
Before choosing any debt relief company, make sure it is a legitimate business with a positive professional standing. One way to do that is to check if it belongs to a local chamber of commerce. Debt Shield belongs to the Maryland Chamber of Commerce, which a member of the Chamber of Commerce of the Unites States.
Debt Shield is also a member of the International Association of Professional Debt Arbitrators (IAPDA), the United States Organization for Bankruptcy Alternatives (USOBA), the Netcheck Commerce Bureau and WebAssured.
5. Choose a debt settlement company with a no prepay penalties policy.
Some debt settlement companies penalize their clients by charging a fee for adding more money to their set-aside accounts. When you deposit more money to your account, you are potentially reducing the length of your program because you may acquire the funds needed to reach a settlement sooner. Debt Shield encourages clients to deposit as much funds as possible into their set-aside accounts so we can start settlement negotiations faster and shorten the length of their program.
6. Choose a debt settlement company with no long-term commitment policy.
Some debt settlement companies require long commitments to their program, but Debt Shield does not hold clients to a long-term contract. Clients are free to leave the program at any time and for any reason. This means we must also provide top-quality service throughout their time with Debt Shield. While there is no obligation for them to make a long-term commitment, we maintain our commitment to them.
7. Choose a debt settlement company that values Truth in Services.
Find out from your debt settlement company what they do to disclose information to their clients. Debt Shield provides a Truth in Services form outlining aspects of debt settlement clients should understand before enrolling. It provides details about what the client can expect, defines what we can and cannot do, and ensures an ethical process. The Truth in Services form, which we require every client to read and sign before enrolling, also includes some negative aspects of debt settlement— something other companies may choose not to mention. Here are a few examples of what is included:
- My creditors may report my forgiven debt as income. However, if my total liabilities (the total of my debts) exceed my assets I may be exempt from tax liability. (For more information on debt settlement and taxes click here.)
- No company, including Debt Shield, can completely stop creditor calls. However, as an added-value, Debt Shield will enroll me with United Consumer Advocacy Network (UCAN), a consumer advocacy group dedicated to work with me in dealing with collection calls.
- Unless an emergency, I agree to cease using all sources of unsecured credit, especially credit cards, while in Debt Shield’s program.
This form is not required by law, but is required by Debt Shield to help ensure every enrolled client understands the debt settlement process. Our clients are fully educated before ever enrolling in the Debt Shield program.
8. Choose a debt settlement company that will disclose how they are funded.
Some debt relief companies, especially consumer credit counseling agencies, are nonprofit companies. Instead of charging you directly (aside from “voluntary” fees) they can be funded by your creditors. Their job is to help you repay your debts to your creditors in full. Debt Shield is a for-profit company that does not work for your creditors, we work for you. The amount of money you set aside in a third-party savings account each month is designed to cover the lump sum amount we will offer your creditors to settle your account; our fees are included in the money you set-aside each month.
9. Choose a debt settlement company that does not report to any of the three credit bureaus.
Creditors typically report to one of the three major credit bureaus when you are late on your payments. Certain types of debt relief can also aversely after your credit standing. When considering debt settlement, make sure the company you choose does not report directly to credit bureaus such as Experian, Equifax or TransUnion, before committing to the program. Learn more about how debt settlement can affect your credit (link to credit doc.)
10. Choose a debt settlement company that gives back to the community.
A debt settlement company’s commitments to its community and its charitable giving practices may not have anything to do with its business practices. But here at Debt Shield, we believe charitable giving is an appropriate extension of what we do for our clients every single day. Learn about our community involvement and see a list of the employee-selected organizations that have benefited from our contributions.
Debt settlement is a legitimate form of debt relief for people with overwhelming credit card debt and/or medical expenses who are trying to avoid filing for bankruptcy. But the reputation of the debt settlement industry has been influenced by misinformation and by behavior from unscrupulous companies. Understanding your debt settlement company is just as important as understanding the debt settlement process. Even if you do not choose Debt Shield as your debt settlement company, we hope you find this information valuable when choosing the right debt settlement company for you.
For more information about Debt Shield and to get your free debt analysis, click here.
