How to Find a Good Debt Settlement Company |
By Kenneth Long on January 20, 2010
“Choosing the ‘best’ debt settlement company is kind of like asking which is the best prison to go to, says John Ulzheimer of Credit.com. There are no good debt settlement companies, not because they're inherently bad but the services they offer are very damaging.”
This statement by John Ulzheimer was featured in a 2009 CNN Money article. When you look around, there is no shortage of experts that tell you to avoid debt settlement companies. These include financial experts, columnists, elected officials and even government regulators.
I also find tons of information from people that claim that debt settlement companies provide a good value and help many consumers. The problem is that I cannot find a single source supporting the debt settlement industry that does not benefit financially from those companies.
When researching companies, follow these steps to help you avoid debt settlement scams:
- Check their rating with the Better Business Bureau. When doing this, you will likely find that the company you are researching has an “F” rating. Understand that any time you do business with any company in any industry that has an “F” rating with the BBB, you are likely to have a negative experience.
- Get a second opinion. Find out how a debt settlement company’s fees compare with those charged by other companies. You will find that credit counseling organizations and many attorneys charge far less than debt settlement companies.
- See what legal actions have been taken against the company. Debt settlement companies are subject to heavy scrutiny by state regulators that have had just about enough of companies either defrauding or simply ripping off the citizens of their states. Even the Federal Trade Commission has been researching the industry to recommend new restrictions on debt settlement companies.
- See if you can do it yourself. Many debts can be settled directly by you without hiring an expensive third party. If your debts are already in default and you have some money to work with, it might make sense to settle one or more of your debts.
Your primary duty is to make sure that you know what you are getting in to before you sign any contract. Do what is in your best interests so that you may avoid legal action and begin rebuilding your credit. If your debts are not in default, then credit counseling will likely be a much better option for you.
Still, if you are bound and determined to hire a debt settlement company, make sure that you understand the pros and cons of debt settlement. Also, consider the negative experiences of thousands of clients of Hess Kennedy and other debt settlement companies that stole the deposits of their customers. If you don’t do your own research, you too could become the next victim of debt settlement companies. |
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