About Debt Settlement and the BBB
There is a lot to know about debt settlement and the BBB. In
recent news, the Better Business Bureau has stripped some debt
settlement companies from their accreditation, which has effectively
placed the whole industry in the negative light.
Debt settlement is the negotiation of the total debt amount down to
less that the full amount. Negotiating accounts can be done by the
consumer (do-it-yourself) or by using the help of debt settlement
companies. What's even better is if the account is assigned to a third
party collection agency after the charge off.
The reason for this is that collection agencies are not expecting to
collect on the full amount, which is the expectation of the original
creditor. Most collection agencies would agree to settle in the 30-70%
range and accept that as the full payment.
So, why have the complaints risen? Aside from the fact that in every
industry, there are bound to be fakes and con artists, it could also
come from misunderstanding when it comes to the fee structures. The
industry standard is 15% of the total debt amount (spread over a period
of time, the most I've seen is 15-20 months) or 20-25% of the
As to how the service fees are collected depends on the company.
Is debt settlement a debt relief scam? No, it is not. Do scam artists
exist in this industry? Of course, they do, and they are everywhere -
just like with anything that you can shop for. The best that the
consumer can do for protection is to check the company's background
before signing up. Always do your homework!
to What Is Debt
Return to Best-Debt-Elimination-Plan.com