If you are in debt, regardless of whether it is credit cards that you got in over your head on, a personal loan that you got behind on and cannot get caught up on, or some other kind of debt, you likely have been inundated with offers from all sorts of debt management companies offering solutions that promise to help you get back on top of your personal financial situation and in control of your debt. However, there are unfortunately many unscrupulous actors in this corner of the financial system. Many will offer to assist you with managing or settling your debts, but then charge you high up-front fees, regardless of whether they assist you in improving your financial position or not. <\/span>Debt settlement companies operate and are paid differently than many of the other types of debt management solutions. One reason debt settlement companies are paid differently is to ensure their best interests are aligned with your own interests in wiping away your debts once and for all. Therefore, debt settlement companies are only paid when they can negotiate a favorable resolution of some, or all of your debts and that debt is then successfully paid off. This ensures that your interests are aligned with the debt settlement company\u2019s interests, as they are only paid if your debt is successfully settled and paid off.<\/span><\/p>\n

What Exactly Is Debt Settlement?<\/b><\/span><\/h2>\n

<\/b>Debt settlement wipes out your debts for good. It does not reduce the interest rate on your existing debts or stretch them out over a longer period but leaves you with the same amount of total debt, like some other types of debt solutions. Other types of debt management programs or solutions simply try to restructure your debt by extending the repayment period or reducing the interest rate on the debts you owe, but this ultimately may not improve your financial situation. You may not be able to afford even the restructured debts that the debt management program was able to obtain for you. In contrast, debt settlement companies seek to wipe out your debts completely by working with your creditors to negotiate an amount that each creditor will accept for resolving your outstanding debt in full. The goal is to leave you debt-free at the end of the process, with no payments whatsoever.<\/span><\/p>\n

What Is Different about the way <\/b><\/span>Debt <\/b><\/span>Management Companies <\/b><\/span>Get Paid?<\/b><\/span><\/h2>\n

While there are many high-priced debt management programs or solutions out there that promise to save you thousands, but charge large up-front fees regardless of whether they save you any money or not, debt settlement companies operate differently. If the debt settlement company is not able to settle your debts, then you do not pay any fees whatsoever. Fees are not collected by the debt settlement company until your debt is settled and has been discharged in full. Payment is thus based on a successful settlement of your debt, not on your agreement to participate in a debt program or an up-front fee that is paid to the debt settlement company regardless of whether you work with them through the end of a debt management program or drop out after the first day. This ensures that you and the debt settlement company have the same interests: getting you out of debt successfully.<\/span><\/p>\n

How Debt Settlement Companies are Paid: an Example<\/b><\/span><\/h2>\n

By way of example, if you have three credit cards with outstanding balances on them and the debt settlement company can obtain a favorable settlement on the first credit card by negotiating with the credit card issuer on your behalf, then you will use a special total control bank account to which only you have access to pay off the reduced balance the debt settlement company was able to negotiate for you. The debt settlement company will then receive its agreed-upon payment fee or percentage of the amount it was able to save you, but only once that debt has been paid off. The same would apply to the other two credit cards, if the debt settlement company was able to negotiate those successfully for you and they were paid off. However, if one creditor refuses to negotiate or is not paid off for whatever reason, the debt settlement company is not paid, because you did not ultimately benefit from the debt settlement company\u2019s services.<\/span><\/p>\n

Ensure You Are Working with a Reputable Debt Settlement Company<\/b><\/span><\/h2>\n

Given how many unscrupulous players there are in the debt management industry, it is important to always ensure you are working with a company that has your best interests in mind. While one way of doing so is ensuring that its interests are aligned with yours in the way that company is getting paid, another is by the external recognition that company has received from organizations that at Signature Servicing<\/a>, for example, we are an accredited member of the American Fair Credit Council and certified by the IAPDA and the BSI. These are all organizations that ensure we are working for the best interests of our clients in all that we do. By the fact that these outside organizations have given our company these designations and recognition, you can be sure we are reputable, and our interests will always be aligned with yours.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

If you are in debt, regardless of whether it is […]<\/p>\n","protected":false},"author":3,"featured_media":369,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"link","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[7,22,23],"class_list":["post-364","post","type-post","status-publish","format-link","has-post-thumbnail","hentry","category-debt-settlement","tag-debt-settlement","tag-debt-settlement-companies","tag-payment-for-debt-settlement-companies","post_format-post-format-link"],"yoast_head":"\n