What to Watch Out for When Using Debt Services
Using debt services can be the perfect solution to bring you relief from overwhelming debt. Since someone else is doing all of the work of recalculating and managing your debt for you, it also takes the stress and pain out of the situation while taking care of financial matters.
Unfortunately, if you choose the wrong debt service agency, you could wind up in more trouble than you started with. Moreover, if you use debt services to pay off certain types of debts, you will end up with a bigger pile of debt than ever. Plus, these companies charge fees to help you manage your debt. They aren't doing it out of the goodness of their hearts. Read on to discover what you need to know to make your selection of a debt services agency wisely.
The Wrong Type of Debt Service
Not every debt service is legitimate or on the up and up. Some debt services are in the game strictly for themselves and the sums of money that they can sweet talk away from their clients. Additionally, some of the staff at some debt services do not have the training it takes to manage large sums of debts and the problems that can arise when negotiating with lenders and creditors.
How can you recognize a good debt service from a poor one? The first step is to read the fine print in any documents or contracts that you sign. This is where you are going to pick up most of the information that you need to determine the company's legitimacy. Next, ask questions. Do not simply accept their blanket statements of "We are going to get you out of this." Ask them how they are going to get you out from under your growing pile of debt. Ask for specific strategies that they plan to use so you can determine whether they are serious about helping you or just about helping themselves to some of your money.
Additionally, hiring a debt service is no different than getting a mortgage or loan. Shopping around for ones that offer the lowest fees and charges makes financial sense. If the debt service is only going to offer you advice and expect you to do all the work, then the fee should be relatively small. However, if on the other hand, the debt service is prepared to go all of the way and actually take steps that will reduce your debt significantly, you can afford to pay a bit more on the fees that they charge.
Debt Services with the Wrong Idea
If the debt service that you contract to help you with your debt insists on combining all of your debts into a consolidation repayment plan, you should take another look at what they are really offering you. Current debt that has low interest rates attached to them do not need to be consolidated with those debts that have high interest rates attached to them.
Additionally, you should not have to pay the entire fee up front until the debt service has actually done some work for you. A partial deposit is one thing to pay when you haven't had any results, but paying the entire amount should make you leery enough to reconsider your choice.