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How to Find a Reputable Debt Relief Company

by Contributor

In a previous post, I addressed the various types of debt relief that are available. Once you’ve chosen the best method to pay down your debt, the next step is to make sure you’re working with a reputable and reliable debt relief company.

This is one of those situations where a little common sense and some research will be invaluable.

Go with your gut

Follow the old adage of, “If it seems too good to be true, it probably is.” If a company is making you promises that sound so great you can’t believe it, then don’t. If you’re gut is telling you something isn’t right, go with that feeling. It’s important to remember that you didn’t get into debt overnight, and you’re not going to get out of debt overnight either.

Research Debt Relief Companies

Before you commit yourself to working with a company, learn about your state laws regarding debt relief agencies and research the company.

Research state and national regulations. Find out if your state has laws in place to regulate the industry. Does your state require a company to have a license? To make certain disclosures to consumers? To cap their fees at a certain amount? If so, ask the company if they are licensed and how much they charge for services. Ask for details of any debt relief plan in writing before you sign anything.

You should be able to find out about the applicable laws in your state by contacting your state Attorney General’s office.

Research the company. If you have a local consumer protection bureau or alliance, check with them to see if they’ve had any complaints about the company.

On a larger scope, find out what kind of rating the company has with the Better Business Bureau. You can also see how many and what kind of complaints have been filed against the company and if they were resolved. Check with the Federal Trade Commission and your state Attorney General’s office to find out if they have received complaints about the company.

Warning signs

There are some common warning signs that a company may not be reputable. Be wary if a company:

  • Cold calls or solicits consumers out of the blue.
  • Charges high fees, especially if the fees are paid up front.
  • Asks consumers to sign over power of attorney.
  • Will not send free information about their services and fees.
  • Encourages consumers to sign up for a plan or program immediately without first sending the consumer the program’s details in writing.
  • Pays their employees based on commission.
  • Don’t offer financial education as part of their plan or program.

Your best bet is to work with an accredited, non-profit company that has your best interest at heart. Make sure you feel comfortable with the company. Remember, this company is going to be helping you to work through a difficult financial situation, and you want to be sure that you’re truly going to get reputable help.

Online Resources to help you research debt relief agencies

Kristen Doerschner is the public relations coordinator for a non-profit debt relief agency and a freelance writer. Through her writing, Kristen covers a variety of topics, but specializes in issues related to financial education.


Published or updated February 8, 2010.
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{ 3 comments… read them below or add one }

1 ParisGirl111

The National Foundation of Credit Counseling is the best place to start to find an accredited agency in your area. Many of these companies are FOR profit and will attempt to sign you up for their programs immediately. Always research before you sign up, and always make sure you get everything in writing! Read the fine print before making any decisions. I joined one of these two years ago and it really worked great for me. Two of my cards interest rates were lowered by 10%. I now work for that company. :)

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2 Dollars Not Debt

Do NOT go to a credit relief company. That will actually be worse than filing for bankruptcy. No, never, not, null, etc… Bad idea for a lot of reasons. Pull yourself up by the boot straps and get weird. Get gazelle intense and follow the DR plan. In my blog about PF, I discuss my path to debt freedom.

Dollars Not Debt

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3 Ryan

Dollars Not Debt, Not all debt relief companies have the same effect on your credit. Please read this article for more information: Comparing Debt Consolidation, Debt Management and Debt Settlement.

Debt consolidation companies are considered “debt relief.” However, they help you manage your debt by helping you take out a debt consolidation loan and managing your payback schedule. People cancreate their own debt consolidation plan, but many people simply don’t know how.

Other forms of debt relief can have a negative impact on your credit score, it pays to research your options before acting.

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