Things Legitimate Debt Settlement Companies Will Not Do

Finding a legitimate company with which to pursue debt settlement is easy, when you know the signs for which to look. Because there are always nefarious individuals about, seeking to take advantage of the misfortune (or fortunes) of others, it’s always a good idea to review carefully before agreeing to work with anyone in situations involving money. To that end, let’s take a look at some things legitimate debt relief companies will not do.

Make Guarantees

Eliminating debt troubles through debt settlement, while potentially quite effective, is subject to the decisions of creditors holding the debt. They will gladly settle for a lesser amount in some cases. However, they will not in others.

In fact, the exact same settlement counselor can contact the exact same creditor’s representative about two different cases and one will be accepted while the other one will be denied.

It boils down to the nature of the circumstances — and outcomes cannot be predicted. This is why no legitimate debt settlement company will guarantee they can make all of your debt go away for “pennies on the dollar”.

Bill Settlement Fees Up Front

This is actually illegal, as the law prohibits settlement companies from imposing settlement fees (typically a percentage of the debt amount settled) before a settlement agreement is reached, approved by you and funded.

First of all, they cannot guarantee a settlement agreement will be reached. So how can they legally bill you for a service they do not know for certain they can provide? Yes, it is customary to encounter minimal signup fees and monthly account service fees, but these typically run no more than $10 each.

A legitimate firm will only bill you a settlement fee once a settlement transaction is concluded.

Enroll You Without Reviewing Your Finances First

Scammers are typically in a hurry. They want to get your signature on a contract and money flowing into their coffers as quickly as possible. So they’ll sign you up right away, without even looking at your financial situation closely to see if the debts you have can be settled at all.

Some debts, like mortgages, car loans, child support, alimony and certain types of student loans cannot be settled. Credit card debt and other types of unsecured consumer debt are usually eligible for settlements.

However, you may not need to go the settlement route in the first place.

A legitimate firm will provide you with a free consultation during which your finances will be examined to determine the best strategy to purse. You can learn more about this at You might be a candidate for debt management. Debt consolidation might be a better approach to pursue. Anyone jumping straight to settlement — without looking things over — is probably trying to rip you off.

Ask For Sensitive Financial Data

Any requests for bank account numbers, Social Security numbers and other sensitive financially related data should be viewed with wariness—especially if it happens before you have a signed contract.

Keep in mind; you should not sign with any firm until you’ve investigated them carefully through the Better Business Bureau, the Attorneys General office in your state and the American Fair Credit Council. These organizations can help you find a legitimate settlement firm with which to work.

Should you encounter any one of these four occurrences during your search for a company, look elsewhere. Those people are likely to be acting in their own self-interest rather than yours. They’ll string you along for years and leave you holding more debt than you had when you started.

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