In a country that offers every luxury and convenience one could reasonably imagine, it’s no surprise that American credit card debt reached an all-time high of $1.023 trillion earlier this year. The previous high came in the midst of the 2008 Great Recession, when credit card debt reached $1.021 trillion, according to data from the Federal Reserve Board.
Bad decisions are a big reason why many Americans find themselves in a mountain of debt, but it’s not the only reason. Life is expensive and in order to keep pace with daily needs, sometimes the only choice is reach for the plastic or go without. If you’re one of the many Americans saddled with debt and you feel like the rest of your financial life will be spent paying it back, it’s worthwhile to explore alternative options, one of which being debt settlement.
Debt settlement isn’t a solution for all debtors, but for the right financial situation, can make all the difference in getting out of the hole and working toward a new financial life. But how do you choose from the many debt settlement providers out there?
Take a look below at these four characteristics any reputable debt settlement company will possess.
Any debt settlement company worth their salt will be accredited, specifically by the Better Business Bureau (BBB) and American Fair Credit Council (AFCC), but an accreditation by the International Association of Professional Debt Arbitrators (IAPDA) doesn’t hurt, either.
They Don’t Charge Upfront Fees
The debt settlement industry gets a bad rap for being illegitimate and full of scams. But inspecting a few key details quickly separates honest companies from scammers preying on stressed-out consumers. Pay close attention to how a debt settlement company structures their fees. The Federal Trade Commission has banned any debt settlement firms from charging debtors any fees before settling debt. Only after a debt settlement company has successfully negotiated with an owed institution and the debtor has agreed to pay the settlement sum can a debt settlement company charge any fees. Any company telling you otherwise is looking to scam you.
They Have a Successful Track Record
Debt settlement is a big decision and can have serious consequences such as negatively impacting credit. If you decide it’s the right decision for your financial situation, you won’t want to work with a company that’s only been in a business a few years or hasn’t settled many debts. A quick search for different debt settlement firms can tell you how long they’ve been in business and the amount of debt they’ve successfully settled.
Additionally, searching objective review sites like Consumer Affairs and the Better Business Bureau (BBB) can give you insights into past debtors’ experiences. For example, a quick search for Freedom Debt Relief reviews on Consumer Affairs shows over 12,000 independent reviews on the service, which should be more than enough to complement your other research.
Something as critical as debt settlement deserves to be handled with patience and care. You don’t want to partner with a settlement firm that’ll rush you through the process or pressure you into even deciding on debt settlement. Make sure the company you choose has reviews that affirm these traits and pay special attention to emails and phone calls with company representatives to see if they try to sell you on debt settlement or try to educate you to make your own decision.
The debt settlement process isn’t for everyone. But for choice debtors, it can provide a life raft to financial freedom. But it all starts with choosing a reputable debt relief provider. Paying close attention to these four traits will help you to make an informed decision.