Sorting Through Debt Solutions Companies

If you are in serious debt you may find it comforting to know that there are so many other people in the same position as you, that there are whole companies dedicated to helping you get out of  debt. Debt solutions companies are everywhere these days.  They offer help especially to those who don’t know how to negotiate with credit card companies themselves. You only need to do a quick search online to see how many there are.

However before you get in touch with any of these companies there are a few things you should know. First of all, you must be aware of the potential dangers of using some debt solutions companies.

Unfortunately not all of these companies are run by people who are genuinely looking to help those in debt. There are people running some of these companies that see those in debt as easy targets and gullible because of their vulnerable situation. People have paid companies exorbitant fees to have their credit score permanently scared, or have ended up with more debt than they started with before approaching the company for help. The people who have been taken advantage of usually make the mistake of being too trusting and perhaps a little bit impatient.

Another side of the potential dangers is the scams. Fake companies and identities have sometimes been set up to lure in those vulnerable people. Once the scam artist has all your personal and financial information – including social security numbers, bank accounts and copies of photo identification there is any number of scams they can pull on you, including but not limited to identity theft.

The purpose of these warnings is not to scare you off the use of these companies, who can genuinely help with solutions to your debt, but to make you aware and to ensure you keep your guard up when looking for the right company to use. Always check their credentials, if possible only use companies that have been personally recommended to you and make sure they are registered in your state to legally perform the duties they claim they are able to.

One last thing to do before paying someone to help you is to sort out the issue that has landed you in so much debt. Do you have credit cards you need to cut up? Do you have an addiction that is costing you money – whether it is drinking, gambling, drugs or even shopping! Getting out of debt will only work once you find the root of the problem and deal with it. Speak to a doctor or counselor if you need to, but take action now.

So you’ve sorted out your old and uncontrollable “I need money now” habits and you’ve found the best debt solution company possible, one that you trust, what happens now? They are going to need to see a comprehensive list of your debts and possibly your payment history of the debts dating back around 3-6 months. They will need records of your current income and confirmation of any expenses such as childcare, household bills, running your car etc. Now is the time to be completely honest with them. There is no point in hiding information from them, it will only prevent them from helping you and you’ll end up paying to waste their time. Remember in order to help you they should not need your bank account numbers and other private information like pin numbers. If you are unsure as to whether you should give them certain information, ask your bank first if they think it is appropriate. Tell your bank you are trying to resolve your debt and need to know if it is necessary for your debt solutions company to have this certain information to help you.

The debt management consultant appointed to help you will now act on your behalf and begin negotiations with your creditors. Make it clear to them you would like to know the consequences of any negotiations before they are complete. For example – they may negotiate to have your credit card debt cut in half, but it may ruin your credit score for the next 5 years preventing you from buying a home a new car or even stopping you from getting certain jobs over the next 5 years. Make sure they keep you in the loop and don’t be afraid to ask questions. Once they have negotiated your debts then they will help you put a realistic budget in place for a set period of time. This budget will allow you to meet the obligations agreed upon in the negotiation.

Debt solutions companies can have a really tough time, it is a stressful and often times very difficult job to juggle someone else’s debt. Finding someone with a little experience and a good successful track record to manage your debt solutions will make this whole process much, much easier for you.

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