So how do you choose which company to use?

If you decide that debt settlement is right for you, how do you choose out of the many organizations offering this service?  There have been many new companies springing up in the last few years offering this type of service, some good and some bad.  So how do you go about finding a company that is going to provide good, personal service and abide by honest business practices? Here are just a few questions to ask.

1)  Do they have Certified Debt Negotiators and Debt Consultants and do they ask questions about your current debt situation and do they review your budget ?
Does the company have certified debt arbitrators handling your settlement? If not you may not get the results they claim.  Does the company you're talking to ask you relevant (and basic) information such as what banks you have debts with, how much you owe to each bank, what state you live in, any recent balance transfers or cash advances? This makes a big difference to a company's ability to help you. If they just give you an estimate without asking these questions, beware.  Compare them to DSA's experience.

Ø       DSA’s Debt Negotiators and Debt Consultants are certified through the International Association of Professional Debt Arbitrators.

2)  Are they a BSI Accredited TASC (The Association of Settlement Companies) company?  Accreditation requires an audit by an independent third party company (BSI) to ensure adherence to rigorous standards and policies.  We are the first company in the industry to be accredited for the second straight year passing our BSI audit for the TASC Best Practice Standards. We are committed to you, our clients, as well as operating our business with the highest level of integrity, ethics, and morals.
 

3)  Are they a member of TASC (The Association of Settlement Companies)? Members are TASC are required to meet certain guidelines; such as proper disclosures, client acceptance standards, and proper business practices. TASC’s goals are to promote good practice in the debt settlement industry, protect the interests of consumer debtors, and lobby on behalf of debt settlement companies for regulation that provides both consumer protection and consumer options. 

4)  Do they make proper disclosures about a Debt Settlement program?  Such as:

þ   Do you fully understand the fee and payment structure that was presented to?

þ   Do you understand that Debt Settlement America is not a law firm and that Debt Settlement America, nor any of its officers, employees or agents can provide legal advice?

þ   Do you understand that Debt Settlement America does not manage your personal savings account that will be used for settlement purposes nor do we make payments to creditors on your behalf?

þ   Do you understand that a settlement program may have an adverse affect on your Credit Report?

þ   Do you understand that Debt Settlement America cannot stop a creditor from charging interest on your account?

þ   Do you understand that under certain circumstances, money saved during the debt settlement process could be considered taxable?

5)  Are they Bonded?

There are some unscrupulous companies out there that could take your money and run; you want to be protected from this.  A bonded company will protect you from a company’s unscrupulous employees. 

Ø       DSA protects you with a $100,000 Surety Bond.

6) How Long Is Their Program and what are settlement percentages are they claiming?
You should ask the questions: “Does it matter how long it takes me to get through the program?” and “Will there be potential problems if the program goes on for a long time?” You need to be aware that in almost all states, doing a program longer than 36 months can be very dangerous! Spreading the program over, 48 or even 60 months can potentially create legal problems, increase costs and increase the risk you will resort to filing for bankruptcy. Some companies pay no regard to this and push you to get started so they can collect monthly fees.  Although some companies seemingly charge lower monthly fees, they compensate for this by stretching out the length of the program.  so that over time, you pay the same amount or more than you would have in a shorter program.

If they are claiming to be able to settle your debts for less than 40 - 60 percent of your outstanding debt then BEWARE!  Settlements less than 40% are possible but should not be expected.  Based on data from the debt settlement industry most clients that completed their settlement programs end up averaging between 40 and 60 percent overall for all their settlements.

Ø       At DSA, we usually recommend that you do not go with a program over 36 months regardless of how appealing it is or how much easier it seems. Having an additional $100 in your pocket every month will cost you considerably more in costs and potential hassle over the long run.

7) Do They List an Address on Their  Web Site and is the Debt Consultant and Negotiator with the Same Company?
Does the same company that negotiates the debt employ the debt consultant? There are many organizations that sign people up and then sell that client to a negotiation company.  We have one of the best negotiation teams in the country and DSA handles everything in-house.

Also it is important that you check to see if the company has an office with a physical address (if a PO box or no address at all, be very wary!)

Ø       Debt Settlement America’s corporate headquarters is located in at 17304 Preston Road, Suite 1400, Dallas, Texas. It is from this central location that we are able to service our clients nationwide.   

8) Do They Have a Service Guarantee?
There are many companies that do not guarantee their services which means the company has less incentive to negotiate your debt once they have collected their service fee. 

Ø   If DSA is unable to settle one or more of the accounts, DSA will refund or adjust the service fee to you, an amount equal to the service fee associated with any such account balance(s) at the time of enrollment.  You must have sufficient funds to settle the account in order to be eligible for the service guarantee and enrollment fees are nonrefundable.

9) What Are the Up Front Fees or is it a Performance base fee plan?
All companies have a set up fee; this should be expected but you should definitely be aware of the amount of up front fees a company wants. If the initial enrollment fee is greater than 6% of the total debt, look elsewhere. Other companies might want all their fees upfront before they start negotiating the debt which should be a red flag. 

Performance based fees  are usually more costly and uncertain.  Performance based plans charge between 18 - 25% of the debt.  With a flat fee structure that DSA offers you know what you are going to pay. 

Ø      At DSA our negotiators are paid incentives for better settlement percentages, which means they are encouraged to make a better settlement for you.  This lets you know the settlement team is working for you and not the creditor. 

10) Who Looks After Your Savings?
Some companies hold your savings in a trust account requiring you to hand over control of your money.  The safer practice is to establish a savings account through a 3rd party provider such as Global Client Solutions or Noteworld.  This type of account is owned and controlled by you and helps you maintain the discipline to meet your savings goals while offering protection from creditors.  Self saving programs where the individual sets aside savings in his or her own bank account also work, but they require greater personal self discipline.

Ø      At DSA, a third party account is usually set up for your savings, but you retain control of this savings account and only you can approve payments out of the account.  You also authorize every settlement before it is finalized.  Thus, nothing is done without your approval.

11) Are they a member of a Business Association, Chamber of Commerce, or recognized by Dunn & Bradstreet?
There are many new companies starting up in debt settlement.  Make sure they have ties to the community that they live in by being a part of a local or state business association.

Ø      At Debt Settlement America we belong to the prestigious Texas Association of Business, the US Chamber of Commerce, the Dallas Chamber of Commerce, Dunn and Bradstreet, and the American Banker's Association.

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