If you are one of the many Americans who have found themselves having to deal with large debts, then you probably have given some thought on getting help from debt settlement companies.
If you do not know this yet, debt settlement companies offer help for people with debt problems. Usually, they negotiate with credit companies to give their customers a lower monthly payment rate or to write off a part of their debts. It may seem like a good deal but the reality of the matter is actually less comforting.
A credit counselor from The Village Family Service Center in Fargo says, “Most of the time, it doesn't work out very well.”
Unfortunately, the current economic situation offers a great market for those who want to make quick money out of debt settlement schemes. Some are even frauds that just take money without really helping their clients. Others are newcomers to the industry and are not capable of offering a good deal to their clients and may actually make matters worse for them.
Companies that offer debt settlement are also known as debt arbitrators or debt negotiators. Debt settlement companies are usually 'for pay' companies. Most of the time, their clients have to pay a considerable sum even before their debt arrangements are actually changed. Some debt settlement companies can also ruin their clients’ long term credit.
As more and more Americans go into debt, debt settlement companies are seeing a rise in demand for their services. Critics are also becoming more vocal in their condemnation of the shady practices of some debt settlement companies. Even the debt settlement industry itself sees and acknowledges these practices.
President of The Association of Settlement Companies, Chris Kesterson had this to say, “There are bad actors in our industry. There are bad actors in every industry.” Kesterson also serves as chief executive of Debt Settlement America, a debt settlement outfit based in Dallas. Chris Kesterson's association boasts 155 members.
Although acknowledging the grimier side of the debt settlement industry, Kesterson also state that debt settlement companies that have the proper experience and competence are also working in the industry. These companies offer solutions to people with deep debt problems, especially when no other option is available.
If you are one of those who are looking into debt settlement as a solution to your debt problems, the best thing that you can do is to research the background of the company that you plan on seeking help from. Beware of companies that are not forthcoming when you ask them questions. You should also ask around and listen to the advice of people who have used debt settlement companies before. If you plan on approaching a new company, make sure that they have experienced people working for them. However, you are probably best served by a company that has been in the business for a long time and has a long list of previous clients.