Answers to Your Debt Settlement Questions

Share Getting answers to some simple debt settlement questions will make choosing your debt settlement company a relatively easy decision.

In this downturned economy, consumers should be wary about fraudulent settlement companies- those that charge enormous fees, or aren't scrupulous in their business dealings, outnumber the honest and professional companies out there.

To determine which company will best represent your needs, the following debt settlement questions need to be asked of any potential candidates - and remember, if they charge a fee, they're working for you.

Reputable, and trustworthy, debt relief companies will have simple answers to these debt settlement questions; if you don't receive positive responses, or any red flags are raised based on their answers, move on to the next company!

How long has the company been in business?

A related question to the length of time they've been in business is how much debt the company has settled. If they've successfully settled a significant amount of debt, they may be worth looking into further; It is possibly to be a young, but successful, reputable debt settlement firm.

Click here for a list of our recommended debt settlement companies.

What is their rating with the Better Business Bureau?

How are their fees structured?

Does this company charge by the hour, or on a commission? The golden rule here is: Anyone who charges fees up front should get a pass.

Should something happen to the company in the course of settling your debt, you'll be unable to recoup any lost fees.

Look for companies that either do hourly based charges, or have a flat fee built into your payment plan- but make sure to get detailed information on just exactly how much, and for what, you're paying. A reliable company will be transparent about their fees.

Are there any money-back guarantees offered? How long before the first settlement payment is made?

Along with "A" ratings, transparent fee schedule, and a good business history, you want to work with companies that provide a 30 day money-back guarantee- at the very least.

Companies that provide this guarantee are more likely to have your interest in mind when taking your business.

Keep in mind, however, that it can take up to 12 months for your debt settlement company to reach a settlement agreement and begin payments. 

When asking your debt settlement questions, ask about an average time frame, as well as any guarantee conditions.

What is the refund policy, if any?

If you've been paying money into a debt settlement account, and haven't seen results in the 12 month period allowed, find out what, if any, refund you would be entitled to.

Legitimate settlement firms will generally give you back all your money, minus their fees, for that year's time. In some cases you will be given a percentage return, and these terms need to be ironed out before making any agreements.

Who will receive your payments?

You will want to work with a company that allows you to use a third-party FDIC insured bank account for payments.  This account should be set up, and maintained, by you.

Companies that want to receive your payments directly, or do not encourage setting up a separate account for payments should be passed over in favor of those that want you to continue to maintain control over your money.

In addition to the basic "how do you work?" questions, your debt settlement questions should include other basics that you may need the answers too as well.

How will your credit be affected? Will you stop getting calls from creditors?

How long before you can expect your total debt to be paid off?

What tax issues should you be concerned about?

Many of these questions should be answered before approaching settlement firms for debt relief, but a company interested in obtaining (and keeping) your business will take the time to go over all your concerns.

If any company you contact hedges on answering your debt settlement questions, move on to another company - this is a sure sign that they're not on the level with your financial interests. For a listing of "A" rated debt settlement consultants, visit http://www.solvingdebts.com

Related articles:

• How to legally erase debt?

Back to Debt Settlement