Debt Consolidation

How To Avoid Scams And Choose A Legitimate Debt Management Company?

Considering the growing number of instances where consumers are becoming victims of frauds and scams, the task of choosing a can be overwhelming. When it comes to dealing with mounting debts, managing things on your own can be very difficult, mainly because of your emotional involvement. Emotions can adversely affect your strategies and so you may not succeed in achieving your goals. On the other hand, the expert appointed by a company that offers this type of service can stay emotionally uninvolved and thus can have a better understanding of where you stand and how you can get out of your debt problems. Besides that, negotiation with creditors is also a crucial part of this process, which is not an easy thing to deal with on your own. But, professional financial counselors know how to convince the creditors for a favorable repayment plan. Following are some of the basic steps that will help you choose a reputable, well-established and legitimate company.

Deciding About The Right Type Of Service

When it comes to choosing a legitimate debt management company, the first thing you have to do is to decide which type of service can be the most suitable for your situation. There are usually two types of companies out there – one that provides only credit counseling services and another that also provides along with the basic counseling services. Where the counselor’s job is only limited to establishing a workable repayment plan so that you can easily manage and pay off your debts while regaining control on your financial matters, a debt settlement expert can talk to your creditor and work out a plan, as per which you just have to pay a certain amount of money as a one time final settlement for the entire debt.

Review The Fees Charged By Companies

If you are looking for a legitimate debt management company, you must be wary of those companies that charge an unreasonably very high amount of fees upfront. If the monthly fee is higher than $50, you should take it as an alert sign and move ahead to find another company. Though in most cases, you will have to pay a certain fee, the fee amount must be quite reasonable. Some people have the assumption that non-profit organizations offer their services for free, which is not always true. Therefore, you are strongly recommended to review the terms of charges thoroughly before you sign up for a specific program. The best debt settlement companies are the ones that charge service-based fee. They charge their fee only after your debts are settled. But again, make sure you are well aware of how much fee they are going to charge. Make sure their commission should not amount to more than 15% of the amount they help you save.

You must also do a thorough background check in order to find out if it is a legitimate debt management company. You can do this by reviewing their records in the office of the Better Business Bureau. Besides that, a safe bet is to choose a company that is duly accredited by the American Association of Debt Management Organizations.


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Posted in Debt Consolidation, Debt Management | 9 Comments »

9 Responses to “How To Avoid Scams And Choose A Legitimate Debt Management Company?”

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  9. [...] With the growing demand for these types of services, many unscrupulous companies have also joined the market. In fact, it should not be an exaggeration to say that at present there are more unscrupulous companies in the market than the genuine ones. Therefore, you have to be very careful. Make sure you do a thorough background check before you sign up for a specific debt consolidation program with a particular company. Check with the Better Business Bureau, Contact the Federal Trade Commission, and call your State Attorney General’s office in order to find out if there have been complaints against those agencies. This step is crucial to avoid debt consolidation scams. [...]

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