Debt Settlement Companies

One way to resolve your credit card debt or other debt is to enlist the help of a debt settlement company. Debt resolution companies often are experienced at negotiating with creditors and may have relationships with major creditors, specifically credit card companies.

The first step in the debt settlement process is for a consumer to reach out to a reputable company that can help. These debt arbitration firms are staffed by credit counselors, people who are accredited in analyzing personal finances. They also have a keen understanding of the current marketplace, including how and why creditors will negotiate a settlement.

Once your finances are detailed, the counselor will check the totality of your debt and then draw up a settlement plan. That plan will be presented to you. It should include details about your monthly payment plan and how the settlement company profits from the transaction.

By resolving your debts, an arbitration company can earn its money in several ways. It should receive fees of a scheduled dollar amount, a percentage of the debt you want settled or an agreed-upon percentage of the amount you save through settlement.

Finding the Right Debt Resolution Company

The Federal Trade Commission (FTC) suggests you look for a number of additional features in a debt resolution company to determine its legitimacy. These features ensure that a company is fair, transparent and professional.

Creditors have no legal obligation to consider any settlement deal, so a debt resolution company cannot honestly ensure an agreement.

A good settlement company will:

• Disclose all program fees and costs before you sign up for a debt resolution program
• Have easy-to-understand written policies about its debt resolution program
• Give you an estimate of how many months or years it will wait before making an offer to each creditor
• Estimate its intended results, but never guarantee a specific settlement amount
• Tell you how much money you must save up before it will begin making offers to your creditors
• Send all resolution offers to you for your approval