Are you in debt? Well, you are not alone. There are millions of people just like you who are struggling to claw their way out of debt. There are companies that will help you get out of debt. Be aware however, that some companies may not be as scrupulous as they appear to be.
What do Debt Companies Do?
Negotiation of your debt is the prime function of a debt company. For a fee, a professional can and will help rid you of your outstanding bills and payments. Their financial savvy to perform the legwork of bill negotiation is offset by the fees they charge. They understand that the creditors would rather settle and receive a portion of the outstanding amount rather than have you face bankruptcy and pay none of the bills owed.
How Much Are The Fees?
The fees for debt companies are not structured and each company has its own pricing arrangement. Some companies charge a percentage of the total debt. This can range between 15% - 18%. Other companies charge a percentage of the debt savings. This amount, usually 25%, is paid once the settlement has been completed. These companies will receive more money in their commissions if they save you more money. For this reason they are more likely to negotiate a better deal for the debtor.
Some companies charge a flat fee as they progress through the debt settlement process. There are also other charges that may creep into the process. Some of these other costs that should be investigated are:
· Initial sign up fee
· Monthly service charges.
Avoid Being Scammed
As people struggle with mounting debt there has been an increase in the number of debt settlement companies. Unregulated companies often lure unsuspecting consumers in with unrealistic debt reduction claims. Credit Unions, banks and regulated debt management companies will provide realistic goals and often offer a no obligation, free consultation.
· Check with the local Chamber of Commerce. If the company is legitimate it will more than likely be an accredited member of the Chamber of Commerce.
· The company should be a member of the International Association of Professional Debt Arbitrators (IAPDA). The company you are considering should have IAPDA certified debt arbitrators. Having certified IAPDA arbitrators means that they posses a foundation of understanding necessary to perform negotiations on your behalf.
· It is also recommended that the company be a member of The Association of Settlement Companies.
When investigating a debt Settlement Company always use common sense and ask a lot of questions. If you feel pressured or do not like the sounds of the answers then maybe a different company will provide you with the peace of mind you require.