How can I decide on if a credit relief agency is legit?

Question

I want to start looking into the option of getting professional assistance to get out of debt. I'm not going to mention any numbers, but the debt my wife and I have accrued over the years is ... well, staggering.

Anyway, I know some company's are out to scam people, and I was wondering if their was any way to research various agencies?

I'm not sure of the term I am thinking of, but the types of companies that I am referring to give you an agent, then the agent negotiates deals with your credit lenders to lower interest rates, then they give you a flat fee to pay monthly and an estimated time of paying off your debt.

Answer 1

Go to this site: http://www.nfcc.org/ and find someone in your area. These are legit non-profit companies. They offer free credit counseling and have debt management programs available, if you qualify, for no fees.

A lot of companies claim to do debt repair/counseling but they take fees up front and just trash your credit.

Answer 2

If they are collecting a fee to negotiate with your creditors, then you're dealing with something that is essentially a voluntary arrangement between you and your creditors, with none of the protection that bankruptcy legislation offers. You can negotiate that type of agreement yourself, for that matter.The best person to help you negotiate an arrangement with your creditors (a proposal, in Canada), or if appropriate, prepare the bankruptcy documents is a Trustee in Bankrupcy.

Did you consider a consolidation loan? You'd then be paying for a loan, which, if you get a lower interest rate (watch the fine print and deal with a mainstream financial institution), can help you make one monthly payment (like you want), but not compromise your credit. Sometimes the lender will ask for you to close the credit accounts with the companies involved, so you don't incur additional charges while you are trying to get back on your feet.

Answer 3

You don't need anyone to do it for you. All they do is negotiate your debts for you and collect a fee. You can do it yourself!

Call all of them and work out a payment plan and try to get your interest lowered or stopped.

Then, make the minimum payments on every one of them. On the lowest dollar value, put all your extra effort toward paying it off. Once it is paid off, then roll that extra money to the next largest balance. Continue this snowball until all your debts are paid off.

You proabbly need to cut your expenses back to the bare minimum. Get rid of cable, cell phones, internet, etc. Lower your electric bill, gas bill, water bill, etc. Don't eat at a restaurant until your debts are under control.

Try to increase your income by getting a second job. If you have a car with payments, get rid of it, and buy a good dependable used car for CASH.

Go to the library and get "The Total Money Makeover". Read it and follwo it carefully.

Go check out Dave's website as well.

www.daveramsey.com

Answer 4

Its easy. If they collect a fee, they are a scam.

Pretty much all of them.

You can do it all yourself. Just call up the creditors and cut a deal. Get any agreement in writing.

Start paying off debts from smallest to largest. Once you payoff the smallest debt, put all your effort on the next smallest.

Dont go out to eat, only eat home.... rice and beans, beans and rice. Pinch every penny so much Lincoln's nose bleeds.

GOOD LUCK

www.daveramsey.com

Listen to Dave Ramsey on the radio too. He's smart when it comes to debt.

Answer 5

They dont do anything that you cant do yourself. Save the fees and do it yourself. What they will do is not pay your creditors for months and then try and settle for less. by then your credit is trash. You can do that yourself and use the money you would pay in fees to put on the debt.
If you get someone to do it for you just remember, If they dont pay your creditors You, and You alone are still responsible for the debt. You can be sued not the company you hired.

Answer 6

I've helped many people do this very thing....if this letter is accurate here is my impression. 1) Kourtnie is right, it does lack a number of key points. If this is a large and busy collection agency, it sounds like an "all in one" acceptance form letter designed to save the collection agent some time. 2) I'm suspicious why the agent didn't sign or use their name. 3) "..to the circumstances involved"....wazzat? Call them up and talk to a human....yeah I know, it violates my Rule #1 but it sounds like they want to work with you. Inform them that you will agree but you want a more detailed agreement, on their letterhead, and signed. As an alternative, send them a written outline of your terms, and request that the sign and return it. Be sure that the terms are very clearly spelled out, and that it makes it clear that the payment they receive will be considered "payment in full" for the entire account and you will have no further liabilities to it.

Answer 7

You can call your credit card company and ask them for an agency. And then ask lots and lots of questions like, "What happens if I miss a payment?"

Check to see if there are any complaints with the Better Business Bureau. If there aren't, it doesn't mean they're a good company. It could just be that nobody has complained yet, but if there are complaints, you can see what they are.

Answer 8

Good question! Would like to know that answer myself. You see all those commercials but who do you trust and how do you find out about them? I know you can look at Better Business Bureau but that will not show too much if it is a new business.

Answer 9

credit relief is bad they get your creditors to right of your debt then your credit is bad see if you can get state agency to refer you to a loan program yo just call your creditors and tell them how much you can pay