Your debt can be managed as long as you are willing to do what it takes. The job now is to find someone to help you. If you are behind on your bills and have a mounting debt, a debt consolidation company may be able to help. But, before choosing one, learn all you can about the process and the company.
Debt consolidation is just one of the options open to you if you are in financial distress. Most of the preliminary things you can do to get out of debt don’t require an outside agency, but if you are meeting a brick wall with creditors or you don’t have any extra funds, a debt consolidation agency can advise you on what to do.
These companies are designed to offer financial advice and a plan to manage your debt. That includes, but is not limited to, consultation on your finances, suggestions for raising money, talking to creditors, debt settlement and debt consolidation loans. Many look to their bank first for such a loan but if they turn you down, this company could be of some assistance.
1. Check with the accrediting agencies for information. The last thing you want to do is get embroiled in a scam. The Better Business Bureau should be able to tell you if there are any complaints lodged against an agency. The federal government is cracking down on scam artists and taking a serious look at weeding out the bad apples. Another place to check is with the International Standards Organization (ISO).
2. Check the credentials of the staff. Anyone working in the debt management field needs training specific to the task. Their experience needs to be more than two or three years. Look for track records for staff members of five to ten years or more. And, look at how long they have been with the current agency.
3. How long has the company been in business? Fly-by-night companies pop up everywhere. Don’t deal with anyone that has been in business less than ten years.
4. Ask about their program for debt consolidation. It could be a debt management program that involves debt settlement as a part of consolidation. What you want is a program that works with the creditors to work out a payment schedule. Debt settlement means that the creditors agree to a lower total payout. That goes on your credit report as a debt settlement which doesn’t look good to future creditors.
5. Ask about fees. They may say that they are a not-for-profit agency but they can still charge fees for their services. Beware of hidden charges the company folds in to get more cash from you.
Sometimes, the debt situation warrants a third party. When choosing a debt consolidation company, ask as many questions as you need to in order to feel comfortable with their services. If you aren’t sure, pass on by.
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