A quick note: My name Marie Megge I’ve owned and operated a successful debt settlement company for nearly 15 years — which gives me firsthand knowledge of how the debt settlement industry works, pitfalls to avoid, etc. In the interest of transparency and not appearing biased, I’m not including my own company (Donaldson Williams) in this article — even though I think we’re one of the best in the industry. 😉If a friend or family member was struggling with excessive credit card debt and they asked me for advice on hiring the best debt settlement company, here’s what I would tell them …
Six Debt Settlement Companies To Consider
To get you started, here are 6 companies worth taking a look at.
They made the list because:
- They’ve all been around for years. Generally speaking, longevity usually signals stability and competence, and that they’re not some fly-by-night operation.
- The vast majority of client reviews for each company is positive.
4. Curadebt
I’m deliberately not providing any type of over-simplified “comparison grid” with features/benefits because I don’t think that tells the whole story of what each company is about and what they offer.
Spend a few minutes at each company’s website, see which ones seem like a good fit, narrow it down to 2-3 finalists, then request phone consultations with each company to make your final decision.
You’re going to be working with this debt settlement company for months and committing a good chunk of money to settling your outstanding debts. So do a little due diligence and feel confident about who you’re hiring to help you through this process.
3 More Reputable, Under-The-Radar Debt Settlement Companies That Might Be A Good Fit For You
The 6 companies listed above are larger, more “corporate” type companies. If you prefer working with a smaller agency with more personal attention, consider one of these companies:
1. ZipDebt Charles Phelan has worked in the industry nearly 20 years. Very knowledgeable, honest guy. Total straight shooter. He offers both DIY (do it yourself) debt settlement training materials as well as full-service, done-for-you services.
2. Consumer Recovery Network Owned and operated by another long-time industry veteran, Michael Bovee. Tons of info at his site about credit debt debt settlement, as well as bankruptcy, student loan debt, credit reports and more. Michael’s been quoted in USA Today, Wall Street Journal and Huffington Post. He knows his stuff, and he’s also a genuinely nice guy.
3. AvoidBK.com Founded by Jared Strauss who previously worked for collection agencies, collection attorneys, and large debt buyers. He now uses his knowledge and experience of the debt collection industry to help consumers eliminate debt and avoid bankruptcy. A+ rating with the BBB, tons of testimonials and success stories on his website.
How To Choose The Right Debt Settlement Company
So far I’ve given you some hand-picked names of debt settlement companies to check out. Now I’m going to give you some specific criteria to help you choose the right debt settlement company — whether it’s one of the companies listed above or someone else.
Here’s what I would look for:
- Proof of results. Do they display copies of actual settlement letters on their website? Talk is cheap. Anyone can claim anything.
- Reviews. What are their clients or industry peers saying about them? Do the reviews seem authentic or phony?
- Honesty and integrity. During your phone consultation with the debt settlement company, do you feel like they’re being straight with you? Or do they seem shifty and evasive?
- No high pressure. If you feel like a sales rep is trying to twist your arm and get you to “sign up” for their program, you should probably walk away and keep shopping.
- Competent. Do they sound like they know what they’re talking about?
- Years in biz. Knowing what I know now, I would not hire anyone that hasn’t worked in the debt settlement industry for at least several years — perhaps at least 5 years. Yes, everyone has to start somewhere, but let someone else be their guinea pig.
- BBB rating. Not an absolute deal breaker. But if I had it narrowed down to 2-3 debt settlement companies, I might use their BBB rating as a tie breaker.
- Accessibility. Prior to hiring a debt settlement company, test out how easy they are to get in touch with. Do they respond to your emails promptly? Is it easy to get a real-live person on the phone? If they are deficient in either their email or phone communications with you, I’d consider that a major warning sign.
- A modern, professional website. You can tell a lot about a company by the quality of their website. Does it look like it’s maintained well or like it hasn’t been touched in 5 years? Do they provide pithy, informative content? Or is their information thin and weak?
- Outrageous claims or guarantees. As they say, if it sounds too good to be true, it probably is. Steer clear of any debt settlement company that seems like they’re blowing smoke up your you-know-what.
- Escrow account for settlement funds. Some debt settlement companies require their clients to deposit settlement funds into a 3rd-party escrow account, others do not. An escrow account is neither a good or bad thing. It’s more a matter of personal preference and what you’re comfortable with.
- Timeframe to settle debt. You want to try and get through the debt settlement process ASAP. I generally recommend a maximum timeframe of 18 months or less. I’d be cautious of a debt settlement company promoting a “5 year program” because creditors are not going to wait around that long. If it’s going to take you 4-5 years to pull together funds for settlement purposes, you might want to explore other options than debt settlement.
Above all else, trust your gut. Yes, gather as much data as possible and ask as many questions as you need to. But at the end of the day, go with the company that you feel most comfortable with, that you have the most confidence in and has your best interests at heart.
FAQ: Debt Settlement Companies
Below are answer to 3 of the most frequently asked questions debt settlement companies receive. If you’d like answers to additional questions, please read my blog post, “Credit Card Debt Settlement – FAQ“.
What can a debt settlement company do that I can’t do myself? Just like there’s no law that says you have to hire a real estate agent to sell your home, you’re free to attempt the debt settlement process on your own, if you wish. However, here’s why I wouldn’t recommend it:
- Debt collectors. Dealing with a debt collector on the phone is not the same as dealing with an annoying co-worker or pushy salesperson. Debt collectors can be mean and ruthless. I’ve seen professional, educated people poop their pants (figuratively, of course) after their first phone call with an aggressive debt collector.
- Negotiation dynamics. Having an independent 3rd-party negotiate on your behalf can be the difference in getting a good deal vs. a great deal .. or no deal at all. It’s why professional athletes have agents negotiate on their behalf. When you’re being represented by someone, emotions are removed from the equation and your opponent cannot psychologically manipulate you.
- Scouting reports. This is the biggest factor. Getting a favorable settlement is largely a function of who you know and what you know. And you’re only going to have this proprietary information by working in the debt settlement industry day in and day out.
What are typical fees charge by debt settlement companies? It varies from one company to the next, but 15-25% of the amount saved is common. Other debt settlement companies charge 20-30% of overall debt, not the amount saved. So you have to read the fine print.
Here’s an example of how the fee would be calculated if you’re using the *amount saved* fee structure. If a debt settlement company settles a $5,000 debt for $2,000, and their fee is 20% of the amount saved, you would owe the debt settlement company $600 (20% of the $3,000 debt reduction). If there is no settlement, there is no fee. Also, in 2010, the FTC banned any debt settlement company from charging fees upfront before any settlements are obtained.
Does the debt settlement process hurt my credit score? This is a touchy subject for a lot of people, but allow me to be candid … if you’re even considering the debt settlement process, it’s highly likely your credit score is already less than perfect. Bottom line, you’re going to have to make a choice — either debt relief (without filing bankruptcy) or a good credit score. You can’t have both. It’s not the way the financial system works. For most people with excessive debt, they’re fine with less than perfect credit for a few years if it means getting debt relief of $10,000 … $20,000 … $30,000 … or more.
How To Decide If Debt Settlement Is Right For You
Up to this point, I’ve tried giving you feedback for how to find the best debt settlement company.
However, I’d like you to consider one final question, “Is debt settlement even the right option for you?”
For some people yes, for others a resounding NO.
But how do you know?
That’s why I created a free report titled, “How To Decide If Debt Settlement Is Right For You“
In the report I cover things like:
- The 3 minimum criteria that you must meet to be successful at the debt settlement process. Failure to meet one or more of these criteria will dramatically reduce your likelihood of success.
- The 3 drawbacks to the debt settlement process. As previously mentioned, the debt settlement process is not for everyone. I’ll describe 3 specific drawbacks to the debt settlement process that you must be aware of before proceeding.
- What happens when you can’t pay? Will creditors sue you? Can they garnish your wages? Can they put a lien on your house? This is a major area of confusion for most people due to the fact that they’ve never been in this situation before … and debt collectors know this. Failure to understand this will put you at a significant disadvantage to debt collectors.
- How to deal with debt collectors. Can they call you at work? Can they call your neighbors? How about friends or relatives? What should you say or not say to a debt collector if they call you? I’ll answer all of these questions plus give you specific strategy for how to deal with deal collectors.
- The one action you should never take. There is one specific action that creditors despise. If you do this one thing, your chances of getting sued go up dramatically.
If you’re even thinking about attempting the debt settlement process I urge you to read this free report first. Just click the green button below.
