Pros and Cons of Do-It-Yourself Debt Settlement
As more and more consumers struggle with their rising debt, more debt settlement companies are coming into the marketplace. Some offer a legitimate service and can significantly help debtors settle their accounts for fractions of what they owe. There are, however, less honest debt settlement companies as well. Identifying the good companies from the bad is a tremendous challenge. Many people are wondering if it makes more sense to simply do everything themselves. In this guide we’ll offer some arguments for doing it yourself, as well as some reasons you might want to hire a debt settlement company (after doing a lot of reference checking of course).
Pros of DIY Debt Settlement
- Save the monthly expense of working with a debt settlement company.
- Maintain control over your financial situation – no relying on a 3rd party to get things done.
- Avoid the hassle of choosing a reputable debt settlement company.
Cons of DIY Debt Settlement
- Many individuals find the process of negotiating their own debt settlements to be overwhelming and time consuming.
- Most creditors will say no at first – knowing how to handle the initial rejection takes time and research.
- Without a third party to guide you and keep you on track, it’s easy to fall back into old spending habits.
- You still have to make and answer calls from your creditors and do all the negotiating yourself.
Interviewing a Debt Settlement Company
If you decide you don’t want to go the DIY route, be sure to do some due diligence before signing on the dotted line with a debt settlement company. At the very minimum you should:
- Ask for, and check, at least 3 references.
- Check the companies record with the State Attorney General and the Better Business Bureau.
- Do an internet search for reviews about the particular company you’re considering.
- Ask what their cancellation policy is.
- Find out how they make their money. Is there a monthly fee or a big fee to pay up front? What if you have to cancel part way through the program? Are you still liable for those fees?
Once you’ve set up your agreement, be sure to call and verify the plan with your creditors directly. Make sure you review your statements and that the payments you’re making are being credited to your account. Just because you’re working with a debt settlement company doesn’t mean that you should take a back seat in the process.
Debt settlement companies can be a huge help to people who need to negotiate their unsecured loans. Whether you prefer to handle the settlement yourself or want to find a debt settlement company, you’ll still save money in the long run if you’re consistent and dedicated. If you decide to hire a company, the trick is to find the right organization and maintain an active role in your settlement. Wanting to get out of debt is the first step – getting out of debt will take hard work and perseverance no matter which route you decide to go. The most important thing is deciding on a path and then sticking with it.