Debt Settlement Companies - How They Work and Where to Find a Legitimate Debt Settlement Company

Added: (Wed Feb 03 2010)

Pressbox (Press Release) - Debt settlement companies vary in terms of both their business model and their overall effectiveness in settling debt. It is important that consumers are aware of how the debt settlement industry works before they talk with a debt settlement company. This way you will know how to distinguish between a legitimate company and one that is inexperienced or does not have your best interest in mind. If you are familiar with how the industry operates then you are much more likely to get a favorable deal on your settlement.

A legitimate debt settlement company will be able to eliminate 50% of your unsecured debt on average although settlement cases in the 70% range are not uncommon. They will then collect a fee based on the amount of debt they are able to eliminate. So if you are $20,000 in debt and they eliminate $10,000 they will probably collect a fee of around 20%. So you will end up eliminating $10,000 in debt and paying the debt company $2,000 for their services.

Make sure that the fee structure is performance based and only applies to the percentage of money they save you not the total balance. Some shady debt companies will have a fee based on the entire balance so in the previous example you would have ended up owing $4,000 instead of $2,000. Also, never agree to an upfront fee. If a debt settlement company is trying to charge you an upfront fee I would strongly encourage you to look elsewhere. There are plenty of legitimate debt companies that will provide you free consultation and will only collect when they perform to your satisfaction.

If you want to get out of debt and hire a debt settlement company for debt negotiation then I have an important piece of advice. Do Not go directly to a particular debt settlement company but rather first go to a debt relief network who is affiliated with several legitimate debt companies. In order to be in the debt relief network, the debt settlement companies must prove a track record of successfully negotiating and eliminating debt. They must also pass an ethical standards test. Going through a debt relief network will ensure that the debt company you are provided with is a legitimate and respected company. This is the most efficient way in finding the best debt settlement companies and increasing your chances of eliminating your debt.

FreeDebtSettlementAdvice.com is one of the largest and most respected debt relief networks on the marketplace today. To find a debt settlement company through FreeDebtSettlementAdvice.com check out the following link:

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