Debt settlement solution companies charge fees. I don't think that should be a surprise to anyone. But what is it exactly that they do to earn those fees? let's have a look, and in the process try and help you understand what services you are receiving for your money
Before you even sign on with a company to negotiate your debts a lot
(should) happen. A representative will gather all of the information
needed to determine if you would be a good candidate for the program.
This information will include...
Not everyone's debt situation is such that they should be considering taking the route of settling their debts. In fact, only people facing financial hardship and considering bankruptcy make good potential candidates for this type of debt solution.
I say this because at this stage of the process the settlement company you are dealing with will be evaluating your file (this task usually falls to the underwriting department or a manager) to determine whether or not the settlement program is appropriate for you or not. Be careful here. Remember that the company only gets paid if you sign up for their program. Reputable companies should be honest with you about what is in your best interests, but ultimately the decision should be yours.
Make sure that you understand exactly what you are getting into before you sign any agreement. Just because a settlement company recommends you join their program doesn't mean you have to. At the very least you should speak to a bankruptcy lawyer and a credit counselor to try and get some different perspectives on your situation.
Once it has been decided by you that a debt settlement solution program is in your best interest, the company will send out a copy of the agreement you will have to sign. This will come either by regular mail, email or fax.
Along with this agreement (actually it should form part of the agreement), you should be sent a disclosure statement that outlines the key points about the program that you should be aware of.
Once a copy of the agreement is in your hands, you will be contacted by the company to review the agreement, review the disclosure statement, and verify one more time the list of creditors and debts that you have provided.
Once you sign the agreement the the actual program begins.