So How Do You Really Know Which Company To Use?

Hopefully by now you have decided that debt settlement is your best option in eliminating your debt problems. The only question is what company do you choose? There have been many new companies springing up in the last few years offering this type of service and, unfortunately, not all are created equal.

So how do you go about finding a company that is going to do you justice while eliminating your debt? Here are just a few things to look out for:

1) Who Looks After Your Money?
Do you keep total control of your money or give it to the debt settlement company to control? Nearly all companies take your money and deposit it into their accounts until a settlement is made. This is not so bad other than the fact that you do not have control over your money or what settlements are accepted. In most cases, companies that hold your money have the power to accept and pay for settlements without your approval. They can force you to accept any settlement better than 50% and automatically send the payment out of your account. You have no control over what settlements you would like to accept or not.

With PBS you keep 100% control of your money in your own personal savings account. This means you control what settlements you accept and what happens with your money. You know exactly where your funds are and have no worries that they could just disappear. Because we never have access to your money, all settlement are approved by you prior to acceptance.

If you do need to drop out of the program you have no worries about loosing the money or fighting to get it back. An added benefit of retaining possession of your settlement funds is the strong control it gives you over the settlement of your accounts. As you pay the creditors directly, once we arrange a settlement, you not only KNOW the creditors got paid but most importantly no one can ever arrange a settlement that you don’t approve of – after all, you “hold all the cards!”

2) What Are the Up Front Fees?
All companies have set up fees; this should be expected but you should definitely be aware of the amount of up front fees a company charges. Many companies charge 3.5% - 5% of the debt in up front fees just to get started. That means if you have $30,000 in debt, at 3.5% you will end up paying $1,050 just to be allowed onto their program.

These fees are sometime hidden by taking the first 2-3 months of payments or a percentage of your monthly payments. Ask how many of the first payments go to their fees and are not applied to eliminating your debt. Paying large up front fees definitely reduces your chances of success on the program and increases the chances of legal activity due to insufficient funds being available at the critical 6-month point.

Some companies want all their fees up front before they even start negotiating the debt; definitely beware of this. You would not pay a mechanic or plumber etc, all the money up front so why would you pay a debt settlement company before they do any work for you. Also, If a company collects all their fees up front, there is no incentive to get you the best settlements they can. They do however have every incentive to close out your account as soon as possible as they've already made their money.

3) How Do They Earn Their Money?
There are 2 main ways that debt settlement companies charge for their services: (1) A percentage of the amount saved on each settlement and (2) A percentage of the total debt.

Companies that charge a percentage of the total debt have no real incentive to get you the best settlement possible. They get their money regardless of whether they get you good settlements or get through the program or not. Once on the program it's easy for them to take any settlement they can just to speed you through the program and get you completed at whatever cost to you. They still make the same money.

When looking at companies that work on a percentage of the amount saved, you should not pay more than 25% but you will find some companies charge up to 35 to 40%. If you come across these companies, save your money. Also most companies will charge their fees at the same time you get the settlement. You need to come up with both the settlement amount and their fees at the same time.

We are the only company in the industry that charge our fees after the creditor has been paid and eliminated. This has several benefits to you as you keep more control and speeds up each settlement, saving you more money. We do however collect our fees at the same time as the settlement on the last debt settled.

Our settlements are 100% performance-based and a flat percentage of what we save you. We are so confident that we can get you out of debt, if we don't save you money on one of your cards. You will not pay one penny in settlement fees on that debt! If we don’t settle your debts and save you money you don’t pay us, it's as simple as that.

4) Is There a Monthly Service Fee?
Is there a monthly service fee? Many companies have started doing this over the last year or so as an extra revenue source. These service fees can range from $30 - $50 per month and are normally explained as the cost of keeping the customer service person employed or the cost to cover legal fees (etc.). If you are charged $40 per month over 30 months you could end up paying $1,200 extra. It is also possibly a sign that the company is having problems surviving on their ability to negotiate good settlements for their clients.

PBS has no monthly charges and we do not recommend using a company that has to resort to this method of making money.

5) Do They Ask Questions?
Does the company you're considering ask you relevant (and basic) information such as what banks you have debts with, how much you owe to each bank, what state you live in, any recent balance transfers or cash advances? This makes a big difference to a company's ability to help you. If they just give you an estimate without asking these questions, beware.

Also, if a company tells you that you can be out of debt for a specific amount (saying something like "if you can come up with $452.32 you would be out of debt in 33 months"), realize that there is no way a company can give such a detailed figure. Negotiating a debt is an art not a science and every deal is different. There are many factors that can effect a settlement such as the state you live in, your hardship situation, your age, your income and of course what creditor we're dealing with.

An established track record, this is for many reasons, but perhaps most importantly it takes time and experience to become an expert negotiator. These skills are not taught in schools or institutes but must be learned from actual experience and hard knocks. For this reason alone, choose a company with at least 5 years experience in this field. Note: being a lawyer or a CCC does not necessarily qualify one as a debt negotiator. If a company has only been in business for 2 or so years the chances are they have not even got a client out of debt yet.

6) How Long Is Their Program?
Ask, “Does it matter how long it takes me to get through the program?” and “Will there be potential problems if the program goes on for a long time?” You need to be aware that in almost all states, doing a program longer than 30 months can be very dangerous. Spreading the program over 36, 48 or even 60 months will create legal problems, increase the costs and increase the possibility of bankruptcy.

Some companies pay no regard to this and push you to get started so they can collect their large start up and monthly fees. We recommend that you do not go with a program over 30 months regardless of how appealing it is or how much easier it seems that it would make your life. Having an additional $100 in your pocket every month because they offer you a longer program will cost you considerable more in costs and potential hassle over the long run.

Many companies that offer a 60-month program charge monthly fees of $40 or $50 per month and this is their real incentive. Although we could easily offer 48-60 month programs we would rather lose a client than put them through the greatly enhanced legal risks and chances of failure.

7) Do They Quote Exactly What You'll Be Debt Free For?
Do they give you an EXACT quote as to how much they can get you out of debt such for, such as "reducing $21,000 down to $12,265.15 for just $427.29 per month". This is just impossible to do and a lie to state such a fact. There are many variables that make a huge difference to the settlements such as the state you live in, the creditor, your age, your health, and your hardship to name a few. Even if the company does bulk settlements, something else we definitely warn against, there is still no way they can guarantee a particular rate. The banking world also shifts constantly as well as your future being unpredictable. This is a pure sales-pitch, avoid it.

One other quick note on the amount of debt you'll pay back and the monthly payments. Anybody can quote low settlement amounts and make their program sound really appealing, especially when they offer a 36 month or longer program with low monthly payments. Use your own judgment and a calculator to see if what they're saying even adds up. Remember, some of your debts will still be incurring late fees, interest charges etc until they have been eliminated; longer programs will increase the amount you pay back and potential legal costs which needs to be taken into consideration. Our average client pays back a total of around 55-60% including all payments, fees and other charges. We feel we are the best in the industry at getting the best settlements and saving you the most money.

8) Does It Sound Too Good?
Does the company you're considering say things like, "That's fine, don't worry about that." or "No problem." to everything you say and push you only to get you started? Does the company sound legitimate or do they sound like they are pulling the wool over your eyes. If everything sounds too easy, there is probably something wrong.

9) Is The Consultant And The Negotiator With Same Company?
Does the same company that negotiates the debt employ the debt consultant? There are many organizations that sign people up and then sell that client to a negotiation company. PBS does not buy or sell clients. We have one of the best negotiation teams in the country and PBS handles everything in-house. Your account will be assigned to one negotiator and their assistant and they are the people you will be dealing with for the entirety of the program.

10) Do They Accept Credit Card Payments?
Does the company accept credit card payments for their fees? If they do it is both ethically and legally wrong. Why would a creditor negotiate on a debt that has just been put on there by the company that's negotiating the debt?

Sound Good? But do you qualify? To find out click here.