The struggling economy has made debt settlement is a booming industry. According to New York Attorney General, it is a rogue industry. If you are bound and determine to utilize one of those services, how do you know which debt settlement company is the best?
BBB Ratings
The quickest way to assess whether a company is reputable is to review their reliability rating with the Better Business Bureau. We ventured to see just how debt settlement companies rated with the BBB, and the results were discouraging.
We found only 4 debt settlement companies that had better than a “D+” rating. The vast majority were rated as “F” (See how debt settlement companies were rated).
How Do you Choose One?
John Ulzheimer of Credit.com put it best:
Choosing the “best” debt settlement company is kind of like asking which is the best prison to go to. There are no good debt settlement companies, not because they’re inherently bad but the services they offer are very damaging.
We would have to agree with John, with one exception. Many of these companies are inherently bad. Many have been the target of regulatory actions after tallying hundreds of complaints.
When we reviewed debt settlement companies in February, 2009, we found some frightening scenarios where client funds had even been moved into other related companies. These clients thought their funds were held in trust for a future payoff, but instead their money was siphoned off into another company in order to enrich the owners.
Lawyer Representation Overstated
One of the biggest misconceptions that debt settlement clients have is that lawyers will actually be working on their behalf. If it is a large debt settlement company, you can be virtually guaranteed that no lawyer will ever review your individual case, much less actually work on your behalf. Instead, these companies utilize low pay paper pushers or automated letter generation systems to provide the service at a minimum of overhead.
If you actually want a lawyer to represent you, then hire one directly. The fees can be similar and maybe even a bit less, but you will have to pay upfront.
Debt Settlement Best When Done Yourself
Most debtors fail to realize how simple the settlement process really is. If you accumulate savings so that you can negotiate your own settlement, you can settle your own debts without paying any third party a single penny.
The most important question is to find out if debt settlement is the best option. If you are dealing with a charge-off, then it quite possibly could be the best option. However, a large portion of financial situations could be better served through other options, such as debt management or bankruptcy. That is where a reputable credit counseling organization can help. They review your financial situation with you and help you evaluate your options.
Tags: best debt settlement, best debt settlement company, choosing best debt settlement company, what is best debt settlement company
I used GHS solutions and they had me debt free in 24 months. I think the problem is people miss there payments and the debt settlement companies can’t do anything ifs payments aren’t made
Congratulations Dd, you defied all odds by completing a debt settlement plan! I cannot tell you how fortunate you are, since debt settlement companies have such a low success rate. For the record, this should not serve as a recommendation since GHS Solutions currently has an “F” rating with the Better Business Bureau.
I have signed up with a debt settlment company (American Credit Group) – I don’t know if there are any legitiamte ones or not. I do know that BBB ratings are completely meaningless and they routinely give all debt settlement companies an F.
Also TASC as mentioned is a scam – created by the owners of some of the worst companies – they obviously pay a lot of money to Google because if you google debt settlement al you get is spam websites from companies associated with TASC.
Dear Charles:
Unfortunately you have not heeded the warnings. Finding a reputable debt settlement company is like finding a reputable payday lender, title loan company or loan shark. They are all bad ideas and there will always be a better option for you. I wish you the best of luck and hope that you do not join the hundreds of thousands of other victims that gave up their remaining dollars only to be taken to court by the collector.
I’m considering signing on with Debt Options. They have a “A+” Rating with BBB….
I have to disagree with the statement that all services that debt settlement companies provide are damaging. [EDITED] is a new service that allows you to settle your credit card debt online and negotiate directly with your lender. [EDITED] only takes a fee from that transaction if you save money. It does cost more than completely doing it yourself, but it does save you time and the need to be a debt settlement expert.
[EDITED] allows you to see all your bad debt for free and to start negotiating with lenders without sharing any personal information (no email, phone or address is ever exchanged with the lender). That’s the risk of contacting a lender directly – it can ratchet up the collection calls and harrassements.
[EDITED] was started because there is a truth in what you’re saying — the basic business model of traditional debt settlement companies is flawed…primarily that it can be very damaging to the consumer to use one.
Anyway, I think it’s worth checking out: [EDITED]. It’s free to use – and to see how much you could save.
Dear PFL:
I show Debt Options having an “F” Rating and a REVOKED BBB Accreditation.