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How to shop for debt settlement companies
If you are facing an overwhelming amount of debt, a debt relief firm may be able to help you settle it for less than you owe. However, opening up your credit information to a company may leave you feeling a bit worried, and rightly so.
How should you compare debt relief companies?It’s essential to find a company that follows industry best practices and has competitive offerings. SuperMoney’s free debt settlement reviews are a great tool to compare debt settlement companies. Read the debt settlement complaints against a company before you give them access to your credit report.
There are other factors to consider when comparing companies. Here are the questions to ask when searching for the best option for you.
What is the debt settlement company’s fee structure?
The fees for a debt settlement service are a key factor to consider as they take away from the total amount the company can save you. Most companies will offer a free, no-obligation debt consultation after which you can choose to sign up for a debt settlement program.
The fee structure for debt settlement programs vary and may contain one or more of the following fee types.
- A percentage of the debt you enroll when it’s settled. For example, if you enroll $10,000 of debt with a 25% fee, and it’s settled for $5,000, you will owe $2,500 in fees (25% of $10,000).
- A percentage of a debt that is eliminated. For example, if $10,000 of enrolled debt is settled for $5,000 and the fee is 25%, you would owe $1,250 (25% of $5,000).
- A flat monthly rate throughout the duration of the program.
- A sign-up fee.
Some firms offer various programs and fee structures, so explore the options from each company. Further, consider if there is a money-back guarantee in case you are not satisfied with the service. SuperMoney's debt relief reviews provide details on the fee structure companies use when setting up prices.
What is the minimum amount of debt the company requires?
Debt settlement companies often require you to have at least a certain amount of debt to qualify for their services. The minimums range from $5,000 to $10,000, on average. Shop around for a company with a minimum debt requirement that matches your needs.
If your debt amount is lower than $10,000, you may want to consider less aggressive debt relief measures, such as a See the debt consolidation loan.
What types of debt does the company settle?
Not all types of debts are eligible for each company’s debt settlement services. Look at each company’s eligible debt types (e.g., credit cards, unsecured loans, collections, autos in repossession, medical bills, business, etc.). And make sure your debt will qualify.
Secured debts, such as auto loans, are usually not eligible, but a good option may be to refinance your auto loans. The same applies to student loans. In most cases, you can't settle student debt, but you can save money by refinancing your student loans.
Check the debt settlement reviews below to see if the debt limits of the company you are considering are a good fit for you.
Does the debt settlement company offer services in your state?
Debt settlement companies are not legal in all states. Further, not all companies serve every state, even where it is legal to do so. Check each company’s service area to ensure you are eligible. You should als check if debt settlement is prohibited in your state.
SuperMoney's debt relief reviews specify the states where each debt settlement company operates.
Does the company set realistic expectations for results?
Check how long the company estimates the debt resolution program will last. On average, programs take two to four years. The speed at which you complete the program will depend on how much money you put in and if you stick to the payment plan. Avoid companies that promise quick settlements and fast results as the process does take time.
Does the debt settlement firm offer comprehensive support for customers?
What kind of customer support will the company offer you? Will you have a dedicated personal advisor or arbitrator? Personalized service can be a significant advantage because your representative will be well-versed about your situation, plan, and goals. This can expedite the process and make the whole experience easier.
Check which days and hours you will be able to reach the support representatives and what channels you will be able to reach them through (phone, email, live chat, etc.). You’ll want a company that offers support when and where it works best for you.
Read the debt settlement consumer reviews at the end of each company profile to see what others have to say
Is the debt settlement company accredited?
Confirm the companies you are considering are accredited by at least one of the leading trade associations in the debt settlement industry, the American Fair Credit Council (AFCC) or the International Association of Professional Debt Arbitrators (IAPDA).
Accreditation helps to ensure that the firm is following the industry best practices and meeting the minimum standard of excellence, consumer protection, and product knowledge.
What do debt settlement reviews say about the company's reputation?
Lastly, look into the company’s reputation to find out how past clients rate the services. You can learn a great deal from real-user reviews such as those included below. And, before signing up, check with your state attorney general and consumer protection agencies to see if there are any debt settlement complaints about serious issues.
Find the right debt settlement firm to take on your debt
Ready to get on the road out of debt? Browse the debt settlement companies below using these questions as a guide. Compare the overall offerings of at least three firms to find the one that offers you the best value for your investment.