Debt reduction companies |
By David Pilley on August 30, 2010
.jpg.aspx) The saying “If it looks too good to be true, it is” must be in your thought process when considering a debt reduction company. If you hear one-liners, like “Eliminate your debt today” or “We’ll reduce your credit card interest rates,” it’s a good idea to stay away because neither of those can be guaranteed. So-called debt reduction companies can misrepresent what they do, and if you’re not careful, you could end up bankrupt.
There are a few criteria to consider if you are thinking about getting services from a debt reduction company.
First, you need to make a list of the companies in your area. Just like with debt settlement companies or other financial institutions, always check with your local Better Business Bureau before doing any business. Has the company been in business for a while? Have there been any complaints or lawsuits filed against the company? You need to know the company’s background, and you shouldn’t do any business if the company has a bad reputation.
Once you know the company’s reputation, check the services it offers. Find out how much each service costs, but also inquire about customer service. How does the company deal with its customers? If the company invests a lot of time into hearing your story and asking questions about your financial history and recent activity, chances are the company is less worried about making a profit and more interested in getting the financial help you need. If you can find a not-for-profit company, you should look for help there first.
In regards to the company’s services, determine which is best for you. Some companies might offer debt settlement, while others specialize in debt consolidation, while others could have both options and more. The only thing that cannot be offered is to improve your credit score by eliminating your debt. Once again, beware companies that advertise themselves as the ultimate debt panacea. Your debt and its interest rate can be negotiated to lower amounts and levels, but they cannot be eliminated.
Finally, you need to be aware of any upfront fees and whether or not you are being charged extra. You need to get your plan in writing from the company before you pay them, and if this doesn’t happen, chances are you could be in a scam. Some debt reduction companies are not scam artists. Some of them are not in the business for the money, and they truly want to help you pay your debt. Pay attention to the criteria listed above, and you will have a better chance of getting financial help.
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