Home » Finance » Debt Consolidation

How To Select A Debt Settlement Company

Aug 17, 2007
A debt settlement company works towards negotiating the amount of debt with creditors. These companies devise a monthly savings plan, based on the total amount of debt a borrower has. When a borrower saves enough money to fully settle the debt, he or she can write a check to clear the debt. In addition to their service charges, settlement companies charge an initial administration fee to set up a borrower's account. Different settlement companies have various sets of standards, and their service fee depends on the total amount of debt a borrower has. Settlement refers to relieving a borrower's debt, for a minimum possible amount, in the shortest possible time, without filing for bankruptcy.

A debt settlement program actually reduces the total amount of loan to a manageable size. Hence, borrowers need to understand the following points regarding debt settlement: -

- Good companies negotiate with creditors to bring down the loan repayment by up to 40-50% of the existing loan, including all agency fees.

- Borrowers are advised to be well informed, and not rush into signing a contract with any debt settlement company.

- It is advisable to look for IAPDA (International Association of Professional Debt Arbitrators) certified professionals, because they have an in-depth knowledge of the laws of debt settlement, and are trained to fully understand the financial condition of borrowers. Most borrowers are able to liquidate their debts within 2 to 3 years using programs.

- The service charges should be known well in advance to avoid confusion.

- Borrowers should ask the company's IAPDA certified professional how his/her money will be used.

- Avoid a company that takes the initial payments for its fees, because the major portion of this money should go towards loan repayment.

- The borrower's monthly savings should be used towards the payment of loan within the stipulated time. Ascertain the amount of monthly income to be paid in the debt settlement savings account.

- Good companies do not report to credit bureaus. Therefore, borrowers should choose such a company so that their credit report does not show negative remarks, or a low credit score.

- It is important to find out whether a company provides any service guarantee. A contract should be signed between the borrower and the debt settlement company, stating that all or part of the client's service fee will be refunded, if the company fails to settle the loan.

- Ask as many questions as possible. Borrowers need to familiarize themselves with all the terms and conditions of a company before opting for it.

- Find out if the debt settlement company is a member of the Better Business Bureau.

- Choose a settlement company that keeps its client's interests in mind.

- Borrowers should research their options before being enrolled in a debt settlement program of a company.

Debt settlement is a debt relief option that prevents a vulnerable borrower from declaring bankruptcy. Borrowers should choose a debt settlement company that guarantees debt relief.
About the Author
Joe Kenny writes for SelectLoans.co.uk, a UK personal loans comparison site, visit us today for information on all loan topics including debt consolidation loans and links to leading UK providers.
Our Site: http://www.selectloans.co.uk/
Rating:
Please Rate:
(Average: Not rated)
Views: 112
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Buying
    • Selling
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources