Are you thinking about consumer debt settlement where will you hire a company to settle your debts? If so, there are five questions you need to ask and to which which you need to get satisfactory answers. These questions will help you to avoid falling prey to some of the unscrupulous businesses offering consumer debt settlement services. The first such question is whether this type of debt settlement is right for you.
Paying less than you owe on your debts is going to have a devastating effect on your credit score unless the company is able to get your creditors to notify the bureaus that you "paid as agreed" rather than you settled your account. If a company is unwilling to do this, then you should pass it by. You want to not only get out of debt, you want to improve your credit situation.
Next, ask is the company registered with the Better Business Bureau? If not, give the representative a polite no. If the company is registered, then check with the Bureau and see if there are any complaints against the company and if those were resolved satisfactorily.
Does the company pass muster with your state or county consumer affairs office? This office will most likely be able to advise you as to the legitimacy of a company as well as other alternatives available to you.
Are you able to afford to pay the amount the company is asking for? If you get several months down the road and can no longer pay the monthly payment you might find yourself in a worse condition than before. If your income is going to change, or may change in the near future, then debt settlement is not for you, unless your salary is going to increase.
What happens if some creditors do not accept the company's offer? You must insist that all of your creditors agree to the plan drafted by the company or you will not participate. If one creditor objects, you should try some other strategy.