What You Need to Know Before You Hire a
Debt Consolidation Company

Not all debt consolidation companies are created equal. If you’re seeking debt management help, you are already under a lot of stress. It is a good idea to seek debt management advice. When all is done, you want to hire the best debt consolidation company. To do this objectively, there are a few things you need to know. There are some telltale signs to look for.

Debt consolidation employees are experts in debt negotiation. They have many more resources than you do. Their objective is to lower your bills. Most companies offer free counseling. This helps you to know the company. It helps the company to know you.

Before You Meet with a Debt Consolidation Company

First, before you talk with a company, try to gather as much information as you can about the company. If they have a website, visit it. If you know someone that has worked with the bill consolidation company, talk with them. The more you know about the company in advance, the better.

You should easily be able to learn some basics about the company. For example, how long have they been in business? How many people have they worked with? What is their track record? Do they have a minimum payment requirement? Do they have a setup cost? Do they charge a monthly fee? Do they advertise very low payments?

Second, you should do your own homework. Add up all your bills. Once you have the total amount you are expected to pay each month, determine what percent of your total bill is being paid to each company. For example, suppose your total bills added up to $1000 per month. If you’re paying a doctor $200 a month, 20 percent of your bills are for medical expenses. Do this for each company. It will give you an idea where your money is going. It will also facilitate your discussion with the debt management counselor.

What to Look For When Meeting with a Debt Consolidation Employee

A good credit management company provides good customer service. They provide good debt consolidation information you can understand. Do you feel comfortable meeting with the employee? Does the employee listen and take note about your financial situation?

If you don’t feel comfortable with the employee or the debt management advice, thank them and leave. If the employee doesn’t spend the first fifteen minutes “really” listening to you, don’t waste any more time… thank them and leave.

A good debt consolidation employee will spend time gathering detailed information from you. For example, they will need to know your personal information. They will need to collect information about your debts. This will include the names, accounts, balances and terms for each company or individual you are paying.

Telltale Signs to Look For

A good debt consolidation company should have your best interest in mind. You should never feel pressured to enter a deal. If they are in a “hurry” to get you into a deal, leave.

If a company is quoting unusually low payments, be careful. Some companies lure people in by promising very low (unrealistic) repayment rates. In turn, you will probably pay a large initial fee and an unreasonable monthly fee. Don’t do it! Creditors normally have fixed, predetermined rates, which they will not lower.

Find out the company policy on the following:

Does the company charge any initial fee? Most good debt management companies charge a reasonable monthly fee.

Does the consolidation company insist all your debt be included in the settlement process? You should have the choice of what to include in your settlement. The more accounts you have the company manage, the higher your cost.

What happens if you’re late on a payment? Make sure there is not a big penalty accessed for being late.

What happens if you are able to pay off your debts early? Is there any penalty? Sometimes, a company will lock you in for a fixed period of time with no flexibility.

If you need to get control of your financial life, a good debt consolidation company can help. Don’t hesitate to take your list of questions with you. It will take the company a little time to give you a quote on the terms of your payment. Be sure to study it out carefully. Compare and shop before you make a final decision.

If you learn about the debt consolidation company first and then pay careful attention while meeting with them, you will save yourself a lot of headaches.