Typing the keywords “debt settlement firm,” or, “debt settlement lawyer,” or simply, “debt settlement” into an Internet search engine will provide you with more websites than you could possibly peruse. There are thousands, upon thousands, of companies and firms out there offering to solve your debt problems. And because the industry is unregulated, there is no simple way to determine if a company is credible or not. So how do you sift through them all to find the one that is right for you?

Debt Settlement Debt Reduction Eliminate Debt

Naturally, there is no easy answer, but there are a few key things to look for to sort out the reputable firms and companies from the scams.

For example, check if the company you are considering is a member of the Better Business Bureau (BBB) and the chamber of commerce. Often if the company or firm is a member of these, it will advertise it on its website, flyers, or in its office.

Along the same line, check how long the debt settlement company or firm has been in business. The longer it’s been around, the more experience it has, the stronger its relationships are with the creditors and banks you owe money to, and the more credible it is.

Also, make sure the plan they offer you will have you paying off your debt within two years. A longer time period means you will be paying more in interest, and you are much more likely to be sued by creditors.

Make sure the company or firm has a thorough understanding of your debt situation before they approve you because not all types of debt can be settled or negotiated.

Finally, make sure that it is easy to get a hold of your company or firm. If communication is difficult in the early stages of setting up a debt settlement, imagine how stressful that could become if problems arise!

Honest, reliable, and hardworking firms and companies are out there, just remember it might take some research to find them.

Debt Settlement Debt Reduction Eliminate Debt

When searching for a way to get out of debt, it is easy to be romanced by companies that make amazing promises that seem too good to be true:

It won’t damage your credit score!
We’ll settle your debt for 25-40 cents on the dollar!
We can save you over 60%-70% of your debt!

A desperate person trying to find relief from suffocating debt could easily latch on to these promises, and unfortunately many do. Then, instead of easing their debt and eventually rebuilding their credit, they are left with lawsuits and bankruptcy. Here are some tips to help you avoid debt settlement scams:

1. For starters, make sure the company is reputable. Is it a member of the Better Business Bureau (BBB), or the chamber of commerce? If you’re working with a law firm, check out its standing with the bar association. Also, check how long the company has been in business. If it’s only been one or two years, you might want to find someone else to help you. Finally, look for letters from real people who were satisfied with their experience.

2. If the company says it can eliminate your debt without damaging your credit score, they are absolutely lying. Unfortunately, there is no way to avoid hurting your credit while working out a debt settlement. However, if you are working with a reputable company, they will have you out of debt relatively quickly, and on your way to rebuilding a good credit rating.

3. Watch out for companies that claim to be able to reduce your debt by 60% - 70%, or to settle your debt for 25 to 40 cents on the dollar. These settlements sound too good to be true, and they usually are. A more realistic settlement, including fees, is around 40%, or around 60 – 75 cents on the dollar.

4. Finally, remember the old adage, “if it seems too good to be true, it probably is.” The best way to protect yourself from scams is to do some research and become an informed consumer.