Falling behind on your debt? You wouldn’t be alone. After all, Americans have lots of it. Between, credit cards, student debt, auto loans, and medical bills, around 80 percent of Americans carry debt, at an average balance of $24,706.
Regardless of the circumstances that land a person in debt, creating a plan of action is what’s most important. Otherwise, how’s it possible to save for retirement, buy a house or enjoy a good quality of life?
Learn what to pay attention to when choosing a debt relief partner with the following tips.
Know How Much You Owe
Every debtor’s current situation and track record is different. The lending institution, debt type, balance amount, account length, and how overdue payments are all factor into whether someone is a good debt relief candidate, and if a specific debt relief company will want to work with you.
While student and auto loans can’t be wiped away through debt settlement, unsecured debt, like medical bills and credit card balances, can be.
Before the internet, person-to-person referrals were how a lot of people found companies offering services they needed. Personal references are still a thing, but it’s much easier to learn the experiences of (more) people through online reviews. With an industry like debt relief where scammers cloud the reputation for even longstanding companies, a quick way to tell a scam from legitimacy is to search places like Trustpilot, Consumer Affairs, Top Ten Reviews, and Highya. You’ll want any company you partner with to have amassed a few hundred reviews so you can get a good sample size of experiences.
History of Business
Would you want to hire a carpenter with a few years of experience over one with a decade or longer? The same is true with debt relief companies. The longer they’ve been in business, the more debtor situations they’ve seen, creditors negotiated with, and debts resolved. Look for debt relief companies that have a proven track record for success. This Freedom Debt Relief reviews page states that the company began in 2002 and resolves an average of 43,000 accounts per month. Keep numbers like these in mind when comparing providers across the industry.
Another quick way to evaluate the credibility of a debt relief company is to check if they’re accredited by any organizations. At a minimum, you’ll want providers to be accredited with the American Fair Credit Council (AFCC) and the International Association of Professional Debt Arbitrators (IAPDA).
Does the Company Exhibit Red Flags When You Speak to Them?
As touched on above, the debt relief industry is a mixed bag of hard-working companies and smooth-talking con artists. For starters, a debt relief company should never contact you, but scammers might have an idea of your financial situation and target you. Legitimate companies will answer your questions and walk you through the process, not pressure you to do anything.
Two main things will indicate a debt relief scam:
- The company requires you to pay upfront for their services
- The company guarantees that your creditors will forgive your debts.
Be sure to report any debt relief scams you encounter to the FTC.
It’s not easy to commit to getting out of debt. Many people choose to ignore their problems and live a life of hardship as a result. Keep the above in mind as you vet providers and pat yourself on the back for making a difficult but necessary decision today.