Best Debt Settlement Companies – What to Look For

When you are choosing a debt settlement company, there are several factors to consider. Each of these companies differs in the caliber of services they provide to their clients, so it is important to research the available options. Debt settlement programs are designed for individuals that are facing overwhelming debt issues and are unable to meet their payment obligations. Utilizing the assistance of a good debt settlement company, often avoids consumers having to file for bankruptcy.

The best debt settlement companies are ideal for individuals with extremely high credit card debt or other debts such as medical bills, overdue auto and personal loans and other collections accounts. There is a lot of stress associated with being in debt. Using an experienced debt settlement company will help to alleviate the pressure creditors place on their account holders. A good debt settlement company will set in place an effective course of action that will place their clients on the road to financial independence. Their services bring hope to consumers that saw no way out of their bleak financial circumstances.

FTC Warnings

The results will, however, vary depending on the particulars of each case. A company that promises successful results should be carefully scrutinized, if not avoided altogther. The Federal Trade Commission (FTC) advises consumers to avoid any debt settlement company that makes any exaggerated or false claims. Below are some of the warning signs to look out for from debt settlement companies that may conduct unscrupulous practices:

• Promises that all unsecured debts will be paid-off for only pennies on the dollar. The actual truth of the matter is that there is not way of guaranteeing a creditor will accept reduced payments for the debt that is owed by the account holder. While JDS is confident we will be able to resolve your debts successfully, we cannot force creditors to accept a settlement.
  
  
• Requests substantial monthly fees for their services as well as a percentage of the amount they claim to have saved on the original debt. There are many debt settlement companies that charge affordable rates and several only collect once they have been successful in reducing the debt. JDS is one such company and we only charge a flat fee based on how much you owe.
  
  
• Demands clients to stop all payments with their creditors. If you can pay back your debt without causing a financial hardship for you or family, that is the best course of action. A reputable company does not force people to stop making payments when they are able to.
  
  
• Informing clients that creditors do not sue account holders for not paying their unsecured debts. While lawsuits are not a common occurrence, there are cases where creditors have filed lawsuits against clients.
  
  
• Making false claims that they can remove accurate negative information from their client's credit report.

Creditors That Refuse to Settle

It is important to note that there are cases where creditors may refuse to work with a debt settlement company to negotiate lower payments on an account. In instances where an account holder immediately signs up with a debt settlement company after either withdrawing a large sum of money from a credit card, or recent activity such as balance transfers and loans, may warrant creditors to refuse any type of settlement offer. In these cases, the creditors will deem the behavior of the person owing the debt, as fraudulent. As a result, they will want immediate payment and may seek legal action to collect on the debt.

It is important that the debt settlement company that is selected does a thorough job of analyzing their client's financial situation and comes up with effective options to satisfy the debt. Typically, these companies are able to negotiate with most creditors, saving you money off your balances, but is is important that the debts are qualified. They should have counselors that are available to devise a realistic repayment plan that creditors agree to, prior to enrolling a client. A reliable company will keep their clients up to date on the settlement agreements and will not exaggerate their claims.

Debt Settlement Accreditation

It is vital to use one of the best debt settlement companies, and therefore, one should look for a copany that is a certified member of The Association of Settlement Companies (TASC). This professional organization promotes fair business practices among settlement companies. They also ensure the rights of consumer protection and monitor industry standards for all of the certified debt settlement businesses within the industry. All consumers are protected when they work with debt settlement companies belonging to TASC.

It is important to make sure the company is staffed with individuals that thoroughly understand the debt settlement market and have the expertise to get their clients the best deal.

When selecting a good debt settlement company, it is also essential to make certain they are in good standing with the Better Business Bureau (BBB). It is a good idea to look up their record to see if they have any complaints regarding their practices. This information is easy to obtain online, for all legitimate businesses have a report with the BBB. Any "fly-by-night" company without a report should be avoided. As should companies who have poor grades (below a B rating).

Debt Settlement & Bankruptcy

Using a debt settlement company is often the last step an individual takes before filing for personal bankruptcy. Individuals that opt to file for bankruptcy will find that it is a long and expensive legal process. It can also take many years to recover financially from the effects of a bankruptcy.

There are advantages for both creditors and consumers regarding debt settlement. The two primary benefits are as follows:

1. Creditor recover as much of the debt as possible as opposed to bankruptcy where they chance receiving nothing.
2. The consumer maintains their assets as opposed to possibly losing credit and assets resulting from a bankruptcy.

Negative Effects

However, it is important for individuals to know that working with a debt settlement company can have a negative impact on their credit, and consumers who do not keep up with payments or have creditors unwilling to settle may end up filing bankruptcy. A trustworthy company will be upfront with their clients regarding the downsides of participating in their program. There are also certain tax implications depending on the type of account that was settled. A good debt settlement company will go over all of the associated risk prior to accepting the consumer's account.

Terms of Service

It is very important to look over the contract and to fully understand the terms of service. The consumer should be clear on all of the services that will be performed in order to reduce or eliminate a debt. It is important to seek the services of a debt settlement company prior to the creditor taking any legal action. It is typically easier to work out a deal before it turns into a lawsuit.

Consumers should never sign up with a debt settlement company that has set up repayment plans that extend beyond 36 months. The sooner a client can pay off a debt, the better it will be for them as well as their credit standing. It is important to work to rebuild credit as soon as possible and any attempts to make debt repayments stretch over a long period of time, should be avoided.

How JDS Works

We are a company that counsels consumers in need of debt relief and match them with a suitable provider. The application process is very simple; there is an online form that needs to be completed. Once this is done, a representative will contact the applicant for a free consultation.

Due to the downturn in the economy, there are many debt settlement companies that are popping up. However, it is better to work with a company that is established, with years of experience. This is a fast growing industry and finding a trustworthy service provider is essential to receiving good results when it comes to settling outstanding debts. With the assistance to a reliable debt settlement company, consumers who are having difficulty managing their debt, can essentially start over and rebuild their credit.