Debt Settlement Questions

If you feel like you know very little about debt settlement, let alone what you should do when considering this option, these debt settlement questions that are commonly asked may help.

Does the company have a web site?

You never want to do anything with a business – especially someone you’re putting your trust into handle your finances and credit score – that doesn’t have a visible presence.   This means that they should have a viable web site that is filled with who they are, what they do, how they can help, and lots of educational information. 

Will the work be outsourced?

There’s nothing like talking with one person and developing a relationship, and finding out that what you told them has been passed onto a third-party.  You want a debt settlement company that does their work in house. 

Can the company answer your tough questions?

To make sure someone isn’t giving you “lip service” with their usual “song and dance,” do some research (via their web site) and come up with a list of questions that are not addressed.  Then, ask those questions and see what response you get on-the-fly.  If the representative doesn’t seem to know and says he/she will need to ask someone, this isn’t a good sign. 

Is the company eligible to work in your state?

Nothing like spending time getting to know a company and then finding they cannot work in your state.  If their web site doesn’t make this distinction, ask them first thing.  

How much am I charged?

The fees can be anywhere from 10-25% of the current debt or the amount of the debt left after negotiation with the debtor.   (It really makes no sense when the reason you have come to this company is because you are having financial issues.)  The sad part is that one one really knows how much a company will charge you. It’s not regulated by law, although the debt settlement process is legal, so it’s a matter of understanding up front what the costs will be to you.

How soon will the matter be settled?

This is another sticky point because some debt settlement companies make you pay upfront, and then take months or even years to get things negotiated.    While that is taking place, you are making payments to the company to apply towards their fee.  Only once that is paid does the money you’re paying go towards your outstanding debt.

Does debt settlement completely clear my credit report?

No.  What it does clear – when finalized – is the debt amount.  It does not clear, however, any late payments.  Those remain on your account for usually 24-36 months.   In the end, you may owe nothing, but your credit score will still reflect that you did not pay your debts on time.

Does the debt settlement company below to the BBB?

The Better Business Bureau is one of the first places you should go with your list of potential companies.  In fact, you should only really do business with those companies who are registered members (and companies DO NOT have to belong to the BBB).

Educating yourself by asking these debt settlement questions is the #1 you should and must do to protect yourself.