Home » Business & Work » Business » Finance

Debt relief and medical bills

0 Comments

1 Like

Like 1

Pin It

Ranked #24,923 in Business & Work, #412,890 overall

Disclosing facts about Debt settlement company

How do you choose the right debt settlement company when there are so many offering their services?

There are several key factors you need to consider when deciding on a debt settlement company. This will help you understand the process and the options that are available to you.

Enquire about attorneys licensed

QDo they have attorneys licensed in your home state who will be working on your case ?

Ans - This is critical; you want to be sure that the debt settlement company has licensed attorneys reviewing and overseeing your case. Having an attorney who is knowledgeable on your state's laws will ensure that your case is being handled properly and that you will receive the most benefit from the program. Attorneys are bound by a code of ethics, honesty and integrity which will offer you more protection than a company who is non-attorney based and is not regulated.

Your money and your debts

QDoes your money go towards settling your debts from day one of the program ?

Ans - If all your money is going towards the debt settlement fees (front loading) and not towards your savings plan; then the debt management company is getting paid before any of your debts are settled. Look for a company that does not collect all their fees up front, most attorney based programs spread out their fee over a 15-24 month period. If the program is not set up to ensure you are building up your savings account from month one; it should be obvious what their priorities are. Credit Card Debt and Debt settlement companies have little incentive to ensure you complete the program if they are paid up front. Debt settlement companies should demand that you start building your savings account from the start; which is essential to your goal of becoming debt free.

Everyone in program or not ?

QDo they accept everyone in the program or do they have a set of criteria that must be met in order to determine if the program is right for you ?

Ans - An in depth financial analysis should be completed by a credit debt analyst and reviewed by an licensed attorney to determine if you are a good candidate for the debt settlement program, to ensure that you will be successful in completing the program. They should be evaluating the debt you need to enroll, your assets and other monthly liabilities; offsetting your net monthly income to determine if the plan is going to create a benefit for you. The benefit being a positive monthly cash flow, referred to as discretionary income.

Your control on your money

QDo you retain control of your money that is being put into an account to settle your debts ?

Ans - You should always retain control of your money. The money you are depositing into an account to settle your debts should be in your name and in your control.

Ongoing support system

QDoes the debt settlement company have an ongoing support system ?

Ans - You should be assigned a debt relief counselor/case manager who will be overseeing your case and maintaining constant contact with you so you receive regular updates on the progress that is being made. You should also have secure access to your personal account information online so that you can check progress at any time.

Disclosing about hardship

QDo they explain to you that you must have a hardship in order to engage in the settlement of your debts ?

Ans - You can not successfully complete a debt negotiation program based on the fact you no longer feel like paying your medical bills or other personal loans. A hardship must exist, loss of hours, spouse loses job and you are now dependent on one income, medical expenses, illness of a working spouse are some examples. If you do not have a hardship, legal problems could arise at some point.

Debt settlement and your credit

QDo they tell you the truth about how debt settlement affects your credit?

Ans - Debt settlement does affect your credit. If they tell you it does not hurt your credit they are lying to you and you should definitely look elsewhere. How much it affects your credit depends on your situation. If you are in collections or late on payments, your credit is already damaged and when you debts are settled, your credit will improve monthly as long as you have other open lines of credit that you have been paying on time. If you are paying on time but know that you can not maintain due to hardship, your credit will be affected until your debts are settled and will improve as described above. Debt Settlement is a far better option then bankruptcy which stays on your credit for 10 years and will haunt you whenever you are applying for financing or even a job. Debt settlement is also a better alternative to debt consolidation because debt consolidation only lowers your interest rate not the debt amount. Many people drop out of debt consolidation because their payments are not significantly less then before they enrolled in the debt consolidation program. Debt consolidation adversely affects your credit because it is considered by lenders as "third party intervention". This means that you were not capable of managing your own debt and lenders view this as only slightly better then bankruptcy. Debt settlement is not third party intervention because you are paying your debts directly via your savings account..

There are many additional questions you should ask the debt settlement company. Look for my future posts on the subject.