Which Debt Settlement Is The Best?

You’re unsure how you will ever repay your unsecured debts, especially credit cards, but you also want to avoid filing for bankruptcy — or are ineligible to declare bankruptcy. What are your options? Debt settlement is a potential relief strategy for borrowers with thousands of dollars in unsecured debts who have fallen behind on payments but want to steer clear of bankruptcy if at all possible.

The idea behind settlement is trying to get creditors to accept an amount less than the total balance but more than $0 in exchange for considering your debt paid. An example would be a creditor accepting $7,500 instead of the original $10,000, but whether creditors will accept a lesser settlement and what percentage of the balance they will agree to take varies on a case-by-case basis.

Many consumers who go the settlement route decide to work with a debt settlement company rather than doing it on their own. Although it is possible to contact creditors on your own, working with a company means letting professionals handle the negotiations for you and also offers additional resources.

Your next question is probably something like: So, which company is the leader in debt settlement? Keep reading to learn more about what to look for in a debt relief program.

Characteristics of Good Debt Settlement Companies

Good debt settlement companies operate on the up and up — and have the credentials to prove it. Upstanding debt relief programs will abide by all the rules set forth by the Federal Trade Commission’s Telemarketing Sales Rule, such as:

• Only charging a fee after rendering services; never up front.
• Disclosing important information to customers before enrolling them, like how much it could cost, how long it could take and potential risks.  
• Representing services accurately.

One way to ensure any debt settlement firm you choose maintains best practices and abides by all industry laws is selecting an American Fair Credit Council (AFCC) member organization. Companies on this list get audited by a third-party to ensure they are complying with high standards. Working with an AFCC-approved company can help consumers avoid scams.

Figuring Out Which Debt Settlement Program Is Best For You

You should know up front there is no one single debt settlement program that is the best for everyone. While there are definitely some top companies with established track records of getting results for clients and operating according to high standards, the trick is figuring out which program is best for you depending on your specific financial circumstances.

Some questions to ask when comparing debt settlement programs include:

• What is the minimum amount of debt you must enroll? For instance, you may not qualify for a program that requires at least $10,000 in debt if you only owe half that much.

• What kind of debts can be enrolled? While most or all programs accept credit card debt, certain other kinds — like private student loan debt — may be included or excluded. It’s important to choose a program that suits your types of debt.

• What do the client ratings and reviews say? If you see positive reviews from clients who were or are in a similar situation to you, the program may be a good fit.

• How do I want to communicate with a debt settlement company? While most companies offer phone-based customer support, only some offer live chat. Another feature only some companies offer is a dashboard to keep you updated 24/7. Setting yourself up for success means choosing the company most in line with when and how you want to interact.

The best debt settlement company for you depends on your exact wants and needs, but it’s always important to choose a legitimate program with a strong record of helping clients.