How to Choose a Debt Settlement Company
Once you've determined Debt Settlement is the best debt relief option for your situation, you have another decision to make: Do it yourself or hire a pro. Hiring a pro is best way to ensure you get the largest settlement deals.
The information on this page will help you select the right professionals to set up and negotiate your debt settlement program and help you stay on track.
Black hat and white hat debt settlement firms
Unfortunately, the debt settlement industry is littered with black hat debt settlement firms who will take your money and do little or nothing to reduce your debt. These are the people you want to avoid.
The good news is there really are legitimate, white hat, debt settlement firms – New Era for example – who can and do provide a valuable service. Here's how to be sure you select one.
The good guys
You can pick the good guys from the bad guys by asking 14 important questions. Those questions and the answers you want to hear are detailed in our special report The Truth About Debt Settlement: 14 Questions to Ask and Answer.
Here's what makes the good guys different:
- No Upfront Fees. A Debt Settlement company should not charge you any fees unless or until they settle your debt. Period. This is not only the most ethical way to do business – per an FTC ruling effective October 27, 2010, it's also the only legal way to charge fees.
- No "add-on" fees. Some debt settlement companies try to get around the law by charging administrative fees, signing fees, consultation fees and various other excuses to get money from you. Good guy debt settlement companies such as New Era charge only a settlement fee, which you do not pay until your debt is settled.
- End-to-end service. Some "debt settlement" companies you may talk with are really only sales groups who will sell or pass your account off to a different company to handle your settlement. This means your financial data is being passed around and the sales person has no control over – or interest in – how your debt is settled. Look for a company such as New Era who will handle your program from beginning to end.
- Experience. With the crash of the sub-prime mortgage industry in [year] many new debt settlement companies headed by prior mortgage industry people suddenly popped up. These companies do not have nearly the experience or the relationships that lead to your best settlement deals. Look for companies who have been around long enough to amass a solid settlement track record. For example, New Era has been settling debts since 1999, and we've settled more than $195,686,494.76 in debt for our clients.
If you eliminate any company that does not meet the above criteria, you're well on your way to selecting a legitimate debt settlement company that has your best interest at heart. There are other factors you can use to evaluate a debt settlement firm and you can read all about them here: The Truth About Debt Settlement: 14 Questions to Ask and Answer.