Dealing with creditors can be a hassle, which is why people often choose to enlist the help of a third party debt negotiator. While working with a third party may be helpful, there are some things to consider. First, are they legitimate? Can they really maximize your chances at successful negotiation? and What type of negotiation will they provide you? It is important to know the answers to these questions before signing up for services. Protect your debt negotiation by asking the following questions:
What services do you provide?
Not all debt relief companies are the same and some tend to advocate or sell one particular type of service, like a debt settlement. You want to choose a company that offers a wide variety of services and doesn't try to treat your financial situation the same as the next customer. A reputable debt negotiation company will offer services in debt management solutions, budgeting and saving, smart money management and investing advice.
Are your staff trained and licensed?
There are a multitude of negotiation companies in operation, which makes it difficult to know which ones are legitimate and which ones should be avoided. A reputable agency will staff licensed and credentialed employees who have extensive training the field of finance. A company that only staffs employees who were trained "in house" should be pursued with caution, as these employees may not be adequately trained or knowledgeable.
How does your company make money?
The debt negotiation business can be broken into two types of companies: for profit and non-profit agencies. Credit counseling companies are an example of non-profit agencies that charge minimal fees for services and are accredited by the government. While there isn't anything inherently wrong with using a for profit business, be aware that you are likely to be charged much larger fees for services and may even be required to pay upfront.
What is required of me in the process?
Using a third party debt negotiator does not mean that you are free from responsibility in your debt resolution. In fact, you should remain an active participant in the process throughout the negotiation. It is important that you stay in contact with your lender and obtain a signed letter of approval for whatever deal is arranged by the debt negotiation company. You may be required to make payments or provide additional information throughout the process. Always keep an eye on the debt negotiator and ask questions any time you are unsure of something.