Choosing A Debt Solutions Company
Mar 31st, 2011 by GuestPoster
Debt solutions companies fall into two general categories: non-profit and for profit companies. The non-profit companies often have established relationships with your creditors. They will negotiate smaller payments and lesser interest rates and sometimes get late payments and accrued interest forgiven, but they do not get debt reduced. For-profit companies on the other hand often seek to get the total debt reduced. That often means they are expecting a lump sum payment when they get a creditor to agree to a reduced balance as in debt settlement. If you do not have a lump sum, it’s best to stick with installment payments (debt management) and a reduced interest rate. Another difference between the two is that non-profit companies strive to keep your payments on a regular schedule while the for-profit companies may hold payments and cause your payments to be late costing you additional money and damaging your credit.
All debt solutions companies cost money to engage. Non-profits request a nominal fee usually less than $10 dollars monthly and for-profit companies charge a fee equal to a percentage of your debt, usually around 14% or more. No company offers a guarantee, but many will claim they have a rate of success that stands in the high percentile range. Your best bet is to choose a company that was referred to you by a friend who was happy with their performance. Also, check the Better Business Bureau for complaints and check the length of time the company has been in business. Longevity is a good indicator of their ability to help you successfully.
Make sure you are comfortable with the debt solutions company. Do not compromise your principles about debt payments. Some companies have little intention of dealing with your creditors in an equitable manner. This could forever ruin your credit or your relationship with the creditor. Carefully examine everything you sign and read all correspondence sent to you from the debt solutions company you select. The company you choose is representing you and should manage your affairs, the same way you would if you had the same professional expertise.
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