If you decide to use a debt relief company it is very important that you find the right company. A competent debt relief company will be able to answer all your questions. In choosing a company, you must do your homework (due diligence). Compare rates, fees (hidden fees) and service of each debt relief company. Buyer beware and be thorough in your research.
Here 10 key questions you should ask yourself when conducting a search for a debt relief company:
Is the company legitimate? Do they have a phone number and does a person answer the phone? Check their business history to see how long they have been in business. Try to find one that has been around for some time. I have heard stories of companies changing names just to remain in business so you should:
Check out the debt Relief Company through the Better Business Bureau to determine if complaints have been filed against them.
Check with the Attorney Generals Office for your state.
Check online debt relief forums. Many allow you to post questions about specific companies. Get feedback from others.
Check your local consumer protection agency
What services does the debt relief company offer? Determine if they will be offering you the loan, or will they refer you to another provider. Some companies negotiate with creditors on your behalf others just offer one big relief loan. Find out whether they also offer other services such as debt management or financial counseling.
Do they offer a free consultation or free quotes up front? If the company charges fees up front before they know anything about your debt situation or before giving you a quote, then they are not the right choice with whom to trust your finances.
How knowledgeable is the staff? Talk a company representative; are they familiar with the loan relief process? They should be able to address your requirements and answer your questions.
Are the fees reasonable? Extremely high fees should be a red flag warning sign while very low fees could be indicative of high hidden fees. You really need to understand how the company will charge you for the service they provide. If the debt relief company tells you they can eliminate your debt in a very short period of time then you should be wary of such offers. Getting out of debt doesn’t happen overnight.
Will the company consolidate all your debts? You should avoid those that will only consolidate a few. This allows you to manage your debts more effectively. Ask how the loan will be structure. If you were asking for a loan without the help of a debt relief company, most, if not all, companies will only consolidate unsecured debt such as credit card bills, medical bills and signature loans. In that case you will be required to put up collateral such as your home because relief loans are often structured as second mortgages. This means that you could end up losing your home if you default on relief loan payments. Your credit rating plays a role in the amount of the loan as well as the interest rate.
Is the debt relief company allowed to provide funds in your state, are the bonded and insured?
Have you read the debt relief agreements? Read the fine print. Read the contract/agreement thoroughly and ask questions to clear up any doubts you may have.
Do they pressure you into making a decision immediately? Don’t make an instant decision. Take time to research all options so you can make an informed decision.
Do you feel comfortable with them? After all due diligence you should have a good idea on which company best fits your needs, if not continue the search, or find a way to do it yourself. Also take a good look at all your debts, the payments and interest rates to find out how long it will take to pay off the loan. Compare that to the terms of the relief loan. Look at the terms of the loan, how long will you be paying on the loan and what is the interest rate.
For help in selecting a debt relief company, visit http://www.debtsolution-strategies.com/debtrelief.htm
February 29th, 2008
Most of America is held in the death grip of mortgage debt, student loans, and credit card bills. It’s not your fault, so why should you suffer for it? It’s one thing to borrow money and pay it back, but it’s quite another when you live in a system which practically requires putting yourself in debt as soon as you hit adulthood. Except the system doesn’t care that it’s forcing you to sacrifice your quality of life — as long as they make money, they’re happy! There are many debt reduction tips out that can speed up the process of getting out of debt and relaxing again.
- Tip #1: Debt Worksheets
Debt worksheets are great for people who like to stick to a system. You can easily make your own planner worksheet for debt with just a chart that lists your daily income, your required minimum payments for bills, your other expenses, and any money left over. People are often surprised that just by laying everything out in one worksheet can reveal an obvious problem that they never noticed for a long time. Keep a calculator handy, and don’t take shortcuts by leaving it to your memory or trying to get away with mental math!
- Tip #2 Debt Reduction Snowball
If the debt reduction planner doesn’t give you any ideas, use it as the basis for what’s called a snowball. Write down all your required bill payments and incomes, and make notes of the minimums required every month. Start by paying the bare minimum for all but the smallest debt balance — any money you have left goes towards this smallest one until it’s paid off. Once that one’s gone, take all the money that used to go towards that particular debt and put it toward your next smallest bill. Keep doing this to build up your debt snowball. Pretty soon you’ll be chopping substantial chunks off the bigger debts.
- Tip #3: Roughing It
It’s the oldest trick in the book, but you can really quicken the debt reduction by cutting corners everywhere. Don’t buy candy, don’t go to the movies, cook more often. Look for bargains between stores and clip out coupons. It’s been said that time and money are interchangeable; spend one and you’ll save the other. Whatever extra bit of money you can save at the end of the month should go right toward your debt.
As you can see, most of this stuff is about careful planning and common sense. But, if you’re really drowning in debt, there are some really incredible secrets out there. I can’t get into them here, but a visit to this website has been a rapid turning point toward a debt-free life for a lot of people. If your debt is bad enough that you don’t see an end to it anytime soon, I highly suggest you consider that.
February 28th, 2008
As much as you would like to think of something else you cannot address the situation without facing it. If you want a creditor after you, the fastest way is too ignore them. You owe them money and if they think you are going to stiff them they will try even harder to get it back. If you put your head in the sand then someone is going to come along sooner rather than later and give you a big kick in the butt and it’s going to hurt because you won’t see it coming. By contacting them you can prepare for them and also possibly get a plan set up that suites your needs. When they are going after you then it will be them deciding your fate.
That kick will come from a creditor who you haven’t contacted to work out an arrangement for payment of an outstanding debt or possibly even the bank with a notification of a pending foreclosure on your house. Possibly a guy showing up at your door to repossess your car that you need to get to work to pay the bills. You might wake up to find your electricity is off. You might find yourself getting a notice of eviction simply because you didn’t contact your landlord to make a payment arrangement while you get your finances sorted. All of these situations can be worked out if you take the first step and contact them.
You need to face the facts that you have a problem and then set yourself goals to resolving the problem. Problems that are left usually present themselves as bigger problems a short way down the line so today is the day that you need to start looking at your debts. What will happen is the “Snowball effect” which is more and more problems adding on to a small problem to start out with till it becomes huge. Taking action now can result in savings of interest and late payment fees. People who have money generally pay less than those who don’t because they are able to pay debt on time and don’t have to fund the additional expense of late payments in one form or another. If you can work out that arrangement you too can also avoid late fees and higher interest. In the long run the savings will allow you to pay off other debts until you are debt free and can live again without worry about collectors calling.
There is one thing that is certain and that is the fact that people who owe money might forget what they owe but those who are owed always know how much is due, so you might prefer to forget but your creditors won’t.Also - more often than not a creditor will adopt a far more positive attitude towards you if you explain the situation you are in and let them know that you are currently working towards full and final payment of the debt as soon as possible.
Bottom Line: Communication can do wonders for your debt reduction program. Why not start a conversation Today!
David Forer is a financial veteran of 15 years. To tap into his knowledge about credit repair, debt management, and budgeting go to his blog at Credit Repair Secrets
February 27th, 2008
