There are several criteria you should review before choosing a settlement company. Let's look at the important points the settlement process and how their company's site:
When selecting a debt settlement company, one of the first things you need to decide whether to pay a settlement in a lump sum, or use a monthly payment plan.
flat
the best way is to pay the settlement is to be ready with a lump sum. It gives you more freedom to pay off your creditors faster and negotiate lower settlements. If a lender is willing to solve the acceptable amount, you will be able to pay.
Where did you get the settlement money? the usual places you can get these resources is a home equity loan or line of credit (if you own your own home), tax refunds, gifts from relatives or cashed out of investments.
Payment Plan
payment plan allows you to settle your debt without having a large sum of money up front. You can put the monthly payment in the "trust account", which leads to settlement company. Once you have saved up enough in the account, the settlement company will negotiate a settlement with your creditor. Then you start saving for the next village, and so on.
There is a risk with a payment plan. May your creditors do not want to wait for you to save the funds needed, and can send your account to collections or the courts. Some companies offer loans to village, similar to the consolidation loan, to allow you to pay your debts in a lump sum, and then put them back on a monthly basis. Most of these plans pay the last 3-5 years, depending on how much you can afford monthly.
fee structure
There are usually two ways that the settlement company will charge for their services.
1) Based on the amount of debt that have or
2) Based on the amount of money you have saved
In both methods, the company will usually charge you a fee in advance, usually called a "retainer fee." good settlement company will put this toward your first settlement, while others can be treated as "Setup " or "administrative" fee.
in method 1, the company will usually take a fee of around 15-20% of your total debt you are trying to solve. If you decide to use a monthly payment plan, most of these fees are usually charged in the first three months, then part of your monthly payments thereafter.
Unfortunately, this type of fee structure leaves a lot to pay up front and then wait a long time to save enough to settle your debt. Often, the settlement company can shorten the period of austerity so that "groups of settlements, where they achieve a greater discount on the debt of you lumping with other clients who owe the same lender.
In a case based payment plan, you pay only after a settlement has been reached, a settlement company pay a percentage of the amount of money that you saved. In this model, based on the results, they have more incentive to get you a lower settlement.
proven
Many companies will provide you with the actual settlement letters, to prove their success. company with good record will be able to provide you access to hundreds if not thousands of these letters as evidence.
Other companies offer testimonials, but they can be manufactured. Be careful in companies that claim to guarantee a settlement because the company can not. However, some will offer money back if they can not settle the debt for you.
Better Business Bureau
Always check the company rating of BBB. This will give you much information about the company and a good sense of how they operate.
First, be sure that the company is actually registered with the Better Business Bureau, and has been in business for at least 5 years. You'll be giving this company a lot of control over their financial lives for a short time, so be sure your homework in this area.
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