Friday, January 4, 2013

How to Choose a Debt Relief Company

As you find yourself neck deep in debt, stress becomes a factor and sound decision making is put to the test. If unsuccessful, you might find yourself in a deeper hole than you originally were. This could be the result of wrong financial decisions because of stress. One great solution to this problem is to outsource the job and hire  a debt relief company to manage your debts for you.

There are plenty of guidelines on choosing the best debt relief company to represent you to your creditors. Here are some of the most basic things you would need to look into when you are scouting  for the company to help you settle your debts.

One of the first things you would need to look into is the Telemarketing Sales Rule (TSR) - which is mandated by the Federal Trade Commission. This embodies the proper conduct that must be observed by companies advertising their debt relief services. This is meant to protect the consumers and make sure that you, as the debtor, would not end up in more debt.

The TSR includes the clause of no fees if there are no results. This means that if the company failed to deliver on their promise, whether it is lower payment or settlement, they cannot collect any fees from you. That being said, the TSR also requires them to be upfront with the fees they will collect once they deliver on their promise.

As you look through and talk to different debt relief companies, here are some questions worth asking to determine if they are suitable for the need that you have.

As most of them would be able to lower down the principal amount you owe, will they also look into lowering down the interest and scrapping the other fees associated with your debt? This is because the amount taken off from the principal might be lower than that of the interest and fees. You would end up shelling out a bigger amount to pay off your debts.

Lawsuits are also a possibility once you hire a debt relief company. Some creditors might take this legal course of action against you. If this happens, ask the company you are talking to if they have a ready pool of lawyers to represent you. It is also a great idea to ask if you can also communicate directly with the lawyer if the lawsuit pushes through. You need to be able to have a direct line with the lawyer for easier coordination.  

You also have to maintain direct control over the funds that you are saving up for payment to your creditors. The debt relief company cannot have total control of the account. This will open the doors to greed and even outright scamming.

Look also into the insurance aspect of the deal with the debt relief companies. There are instances that representation by these companies make the matter worst and you end up having to pay for a bigger amount. The insurance is in place to protect you from these scenarios.

Finally, the debt relief company you are talking to could agree to a lot of things but having them in black and white binds them to those commitments. Make sure that they are amenable to signing a contract, a memorandum of agreement / understanding (MOA/MOU) to make sure that they deliver on their promises. Make is also a habit to read the fine print of everything that you sign. This practice makes you aware of all clauses in the contracts.

There are many debt relief options to choose from. Find out what they are and which one is the best approach to relieve you of your credit problems. Go to this link to know more about it:

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