When you find yourself in financial hot water, it can be challenging to know how to get out of it. From credit card debt to falling behind on major bills -- such as mortgage or student loan payments -- you may have no clue how to crawl down from your mountain of debt. Debt solutions companies offer consumers financial advice on how to deal with these types of issues; however, depending on the company, it may or may not be in your best interest to take advantage of such services.
Some Charge Exorbitant Fees
If you have to pay hundreds -- or thousands -- of dollars, then that should be a red flag. If you are already in debt, a good debt solution company shouldn't be taking you further into financial hot water. Moreover, always read the fine print because once you sign papers asking the company to represent your interests, you may not be entitled to a refund if they are unsuccessful in helping you.
You Can Do It Yourself
The types of negotiating debt solutions companies do for consumers are generally methods you can undertake yourself. Most creditors are willing to work with you if you have fallen behind or need a payment plan to pay your debt. Simply submit your proposal in writing and make sure it is something you can afford. If the company accepts your terms, ask them to put that in writing as well. Then, stick with your payment plan and start to emerge from debt. This is not much different than what a debt solution company can offer you, but it costs you nothing.
There Are Good Companies Out There
Not all debt solution companies are sharks waiting to take advantage of unsuspecting consumers. There are reputable companies that not only teach you how to lower your debt, but provide you with the resources to avoid getting in the hole again. These companies generally charge reasonable prices -- if any at all -- and don't accept clients they know they cannot help.
Do Your Homework
Before you agree to work with any debt solution company -- even one that seems like a good one -- do your homework. Check with the Federal Trade Commission and the Better Business Bureau. If there are complaints lodged against the company, walk away no matter how reputable they may seem. Many debt solution companies can talk a good game, making you feel like you can be debt-free tomorrow. Still, before you give them a dime, see their track record for yourself.
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