Individuals in debt who wish to make use of the services of a debt management firm should do research before committing themselves. An unscrupulous debt management firm can harm a debtor's interests in many ways, so make sure to keep the following 4 things in mind before hiring a debt management firm.
Any agency that calls you by phone or sends you spam should be avoid. There are a lot of debt management firms that advertise in the yellow pages or on the Web but do not over-aggressively solicit clients. Therefore, there is a good chance any company which does so is not on the level. Most of the time, solid references will not be provided by debt management companies that follow a cold calling policy or send unsolicited emails. Most of these companies do not even keep a reserve fund, which serves as a guarantee for the debtor that his creditors will be paid.
Non-profit agencies do not necessarily offer better service. First thing to remember is that not all non-profit debt management firms offer their services free and some firms charge up to 15% of the debt amount. If a debt management firm is a non-profit organization, it doesn't mean that it is more efficient service provider than those that charge for the services or it's a better debt management firm. In fact, because they are making a profit from their work and their profitability is directly linked to their credibility and reputation in the market, companies charging for their service are under an obligation to free their clients of debt as efficiently as possible.
Parting with a credit card information on the phone should be avoided. A debt management firm will never ask you to provide your credit card number or bank information on the phone if they are honest and reputable. The reason is because they understand that callers can be impersonated and the increase in online frauds is reason enough for individuals in debt to be extra cautious when checking out debt management firms. If the debt management company is acting in good faith, then they will never ask a prospect or an existing client to part with sensitive information of any kind over the phone.
You shouldn't believe anyone who offers a deal that's too good to be true because chances are, it probably is. What debtors often come across with are debt management deals that promise to reduce their debt by half in short time. It's likely that the debtor does end up paying high fees and a substantial upfront amount to the debt management company even though this is rare. Such companies also discourage debtors from communicating with their lenders; this is never a good idea and invariably leads to a negative impact on the debtor's credit rating. If a debt reduction company promises to offer more than some interest reduction and counseling on getting out of debt and staying debt free, the claim should ideally not be taken at face value.
Any agency that calls you by phone or sends you spam should be avoid. There are a lot of debt management firms that advertise in the yellow pages or on the Web but do not over-aggressively solicit clients. Therefore, there is a good chance any company which does so is not on the level. Most of the time, solid references will not be provided by debt management companies that follow a cold calling policy or send unsolicited emails. Most of these companies do not even keep a reserve fund, which serves as a guarantee for the debtor that his creditors will be paid.
Non-profit agencies do not necessarily offer better service. First thing to remember is that not all non-profit debt management firms offer their services free and some firms charge up to 15% of the debt amount. If a debt management firm is a non-profit organization, it doesn't mean that it is more efficient service provider than those that charge for the services or it's a better debt management firm. In fact, because they are making a profit from their work and their profitability is directly linked to their credibility and reputation in the market, companies charging for their service are under an obligation to free their clients of debt as efficiently as possible.
Parting with a credit card information on the phone should be avoided. A debt management firm will never ask you to provide your credit card number or bank information on the phone if they are honest and reputable. The reason is because they understand that callers can be impersonated and the increase in online frauds is reason enough for individuals in debt to be extra cautious when checking out debt management firms. If the debt management company is acting in good faith, then they will never ask a prospect or an existing client to part with sensitive information of any kind over the phone.
You shouldn't believe anyone who offers a deal that's too good to be true because chances are, it probably is. What debtors often come across with are debt management deals that promise to reduce their debt by half in short time. It's likely that the debtor does end up paying high fees and a substantial upfront amount to the debt management company even though this is rare. Such companies also discourage debtors from communicating with their lenders; this is never a good idea and invariably leads to a negative impact on the debtor's credit rating. If a debt reduction company promises to offer more than some interest reduction and counseling on getting out of debt and staying debt free, the claim should ideally not be taken at face value.
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