This is a difficult question to answer because they are often intermingled with the scammers and rip-offs. The biggest problem is the number of advertisements you are exposed to regarding debt problems. Since we are a consumer based society driven by exposure through advertisement we will generally go looking for whatever service we may need via media or internet advertising. This is a major concern considering that within the debt assistance marketplace the majority of the advertising is done by companies that are simply generating leads to sell to the actual business that provide the services. The technology used in this process often has you believing that you are calling the service provider directly. They will use a process labeled “Live Transfer”. It works by you calling the number and the advertising company screens you with some basic information questions. They then tell you they will transfer you to a “debt specialist” who is usually nothing more than a scripted salesperson for the actual debt management company. To find the real negotiators, mediators, and arbitrators that are truly going to use their talent to work for you you should look for people and/or companies that provide these services to different types of customers rather than exclusively for debt. Try searching for these three terms without including “debt”. Many of these “true” negotiators can be found as business consultants or Mediation and Arbitration companies that offer negotiating as one of their services. You can also search the debt subject under “Attorneys” or “Lawyers” but make sure that you are talking directly with an attorney and not just someone “associated” with them. The best way to decide on an honorable company or individual to deal with is to follow these simple guidelines.
1. Do not necessarily select the company that simply offers the lowest fees for their service. This could just be a way of selling you.
2. Always insist on talking directly to the person that will be doing the negotiating. Do not settle for his/her “assistant”.
3. Deal only with companies or individuals that allow you to preview, verify. and reject any settlement offer you do not like.
4. Make sure that when signing a Power of Attorney that it specifically states “..limited to the purpose of negotiating your debt ..” or something to that effect and that it “may be severed, by either party, at any time with reasonable notice “.
5. To protect yourself work only with companies that do not request you pay “upfront fees” Deposits, or handle your money in any way. Attorneys are the exception as they will almost always charge a retainer. If you use an attorney verify his license and BAR association status in the state he presides and locate his local listing in the phone book and verify through phone contact that he/she is actually who you are dealing with. You may be able to establish a “flat rate fee” or lower the fee percentage by offering to pay some administration charges for the negotiator. These generally would pay for the fees associated with serving notices, recording legal documents, ect and shouldn’t be more than a couple hundred dollars. Remember these are professional negotiators and they know everything is “negotiable” including their fees.
6. Expect to pay a good negotiator an honest fee. When paying nothing upfront negotiators fees will run between 15% and 50% of what they will be able to save you in a payoff settlement and 8% to 15% of total debt if they are negotiating a payment style payoff. Some will have an “either/or” clause if settlement is a combination of payoffs and extended payments. Whatever their fee it should be defined in a signed agreement prior to you accepting any settlement. Considering your circumstances you can expect that the fees will be due and payable immediately upon your accepting the negotiated settlement and they will usually require them paid in cash, wire transfer or certified funds Also expect the negotiator to protect themselves by inclusion of a “null and void” or “fees considered earned and due” clause if you attempt to negotiate with the creditor yourself after the company has presented a settlement to you. Be fair and demand to be treated fair.
7. Do not deal with anyone that tells you to quit making your payments or that you have to be at least 5 months past due. If you already are there then recognize this as a red flag to further investigate the negotiator before signing.
8. Always remember that you are at risk of being scammed or ripped off any time you provide payment before services (upfront) or allow someone else to handle your money in the form of a deposit, retainer or savings or escrow account. Preferably you will be paying the creditors directly.
9. Never deal with a company or individual that claims to be able to eliminate your debt without actually arriving at a settlement with your creditors and paying that off. The world abounds with “debt elimination” scams that will come back to haunt you!
There is no replacement for common sense. By following these guidelines and suggestions and using good common sense you should be able to decide who will do right for you in the process of assisting with your debt. If you have questions please feel free to email me.