Over the past few years debt relief companies have been steadily making headway into the financial services market. And while the stiff competition should have forced a few companies to noticeably rise to the top of the industry, this hasn’t actually happened.
While debt relief is a valuable, legal way to handle outstanding debts, the flood of new companies makes it more challenging to identify which companies are honest and reliable. The truth is that plenty of people saw an opportunity to make a quick buck and seized that opportunity. Their interest isn’t in resolving their clients’ credit card debt, but instead it’s in their own profit.
It has left consumers who genuinely need debt settlement confused as to where to turn for help. As I see it, the debt relief companies fall into 3 basic categories – the good, the bad and the ugly.
The Good
Like any good financial services firm including credit repair, an honest debt relief company should be counseling you, not telling you what you should do. Your debts are specific to you and solutions should ideally be customized to meet your needs. You may only be able to pay off one debt at a time or perhaps you only have a few hundred dollars in debt; whatever the situation, a debt relief company should be able to cater to your needs no matter what.
It’s simple math really, the less a debt settlement company charges, the more money you’re left with to pay off your debts. The industry average is between fifteen and twenty percent. FYI Mycreditgroup only charges 5% the absolute lowest in the industry.
Debt relief is definitely going to take a little bit of work from you. You need to budget, save and actually pay off those outstanding debts. While many companies have a lot different options like credit repair or help establishing new credit, no company can do it all for you. You should definitely be told this up front, and a capable debt relief company will certainly tell you exactly that.
Debt can be handled individually, and depending on your situation it might need to be. While some debt settlement firms suggest that you pay money into a specialized account set aside for 2 to 3 years until there’s enough money built up to settle all of your debts, this approach can be extremely damaging since you’re simply ignoring your creditors. It’s best to find a company that’ll contact all of your creditors, explain your financial situation to them and work with both you and your creditors on a solution that’s mutually beneficial.
The Bad & The Ugly
Tomorrow, I’ll continue with what you definitely want to avoid when it comes to debt relief. From bad business practices to outright scams, it’s amazing that the FTC isn’t trying to do a better job when it comes to getting rid of these types of companies.
