Debt Settlement Companies, Don't Settle With Some of Them, Part 4
Debt settlement companies is the topic and is last of the series of four articles to help the debtors watch out so they will not drown in a sea of debt and to cut the cost instead of adding to it when dealing with them. When the problem gets out of hand, we know we have to get help but get it right or get deeper in debt.
FTC Guidelines to Help Select The Right Debt Settlement Companies
The company must be a member of the Better Business Bureau.
It must have some kind of certification as a debt settlement company.
All the procedures and policies should be properly documented.
It should have a way to resolve customer complaint.
It should have a legal department with experience on credit industry.
It should be ready and willing to go through regulatory evaluation.
It should be able to provide a comprehensive review of the program.
All fees should be disclosed before starting the contract.
The service should be done by the same company from start to end.
Debt Settlement, Is It For You?
This process can be helpful to some but it is not for everyone who has unmanageable debt. So who is it for? If you are in a situation where you are so behind on the debt to the point there is no chance of ever catching up, then the debt settlement is for you. It will be an alternative to bankruptcy.
So how do you know if you are behind significantly? If you have not paid the bills for six months then you are considerably behind on the debt. So if you do not mind getting sued and having a low credit score, then this is an alternative to bankruptcy especially if you are not planning to buy a home.
FTC Steps In to Protect the Consumers From Shady Debt Settlement Firms
The Federal Trade Commission has set up new rules for the debt settlement companies. This was after some of these companies have been charged in over 250 state and federal cases for false advertisements. Thousands of consumers have also complained about them.
Here are the three major parts covered by the changes:
The debt settlement companies will not be allowed to collect upfront fees. This is great because some collected thousands without negotiating one debt agreement. The companies can only charge fees after successfully settling or reducing at least one of the debts. The fees must be in a written agreement and be in proportion to the debt.
If the consumer has to pay into a an account, this should be in a bank that has federal deposit insurance. This should also be in the debtor's name and under his control as well.
The debt settlement company is required to put down in writing all aspects of the agreement including the harm to the debtor's credit as a result of the debt settlement.
There you have everything you need to know before you sign up for any contract to pay off your debt. Armed with this series of four articles, you will know your options before making any decisions. Doing a little research will go a long way in avoiding problems before signing with any debt settlement companies.