Choose a trusted debt settlement company to help resolve your debt

Designed for those in very serious debt hardship, debt resolution – also called debt settlement – offers an alternative to debt management (credit counseling), debt consolidation and bankruptcy. Debt settlement programs help qualified clients who stay with the program fully resolve their debts, typically in two to four years. In choosing a provider, heed this expert advice.


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  • pay attention to the cost structure
  • read
  • contact a reputable provider to learn more
  • seek individual treatment
  • evaluate the providing company

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  • choose a one-size-fits-all company
  • rely solely on BBB ratings
  • neglect to ask for information on results
  • work with a company that charges for educational information
  • fall for a company that doesn’t abide by new FTC regulations

[publishpress_authors_data]'s recommendation to ExpertBeacon readers: Do

Do pay attention to the cost structure

Debt resolution, or settlement, firms charge consumers a fee for their services. This is generally a percentage of the debt enrolled or a percentage of the debt reduced. Federal Trade Commission (FTC) rules state that fees can be charged only after the firm has successfully negotiated the debt on terms the customer has accepted. To accumulate the funds to pay creditors, you will deposit a certain amount each month into a dedicated account that you own and control.

Do read

Before hiring a provider, check the Federal Trade Commission information on the industry. The FTC notes two red flags for consumers. Companies should not charge fees before settling debts, or guarantee they can do away with all unsecured debt. Reputable companies will be upfront about their fees. They also will counsel you on the possible challenges of the process, and tell you how long the process might take before they make offers to each creditor.

Do contact a reputable provider to learn more

One place to begin is with the American Fair Credit Council, which enforces a strict code of conduct for its members, and only accepts as members companies who comply with the FTC regulations for the industry.

Do seek individual treatment

A company’s representative should take time to talk seriously with a consumer about his or her debt situation. The company should provide actual consultations at no charge.

Do evaluate the providing company

Look for good, relevant education and experience in the company’s management — not a team that jumps from opportunity to opportunity to make its fortunes. See how long has the company been in business, how many customers has it served, and if the company’s own employees are those who will actually provide service through the life of the program (vs. if the provider contracts out to others once they have enrolled a client).

[publishpress_authors_data]'s professional advice to ExpertBeacon readers: Don't

Do not choose a one-size-fits-all company

Some debt resolution/settlement providers will try to steer every consumer who contacts them directly into a debt resolution program. A good provider, though, will take time to analyze the consumer’s situation and help determine the best type of debt relief program for that individual. Depending on type and level of debt, and current and future income potential, other forms of debt relief (debt consolidation, credit counseling, sometimes even bankruptcy) may be more appropriate.

Do not rely solely on BBB ratings

In the past, the Better Business Bureau did not have a system for separating good companies from bad. Instead, they rated all companies with a “D” or an “F” due to concerns about the industry, and an inability to perform the analysis required to determine which companies were providing value to consumers. That is all changing in response to the Federal Trade Commission’s new regulations for the industry. Although the BBB is still not using a traditional rating system when evaluating debt resolution/settlement companies, it has recognized some companies’ consumer advocacy and leadership records, and maintains that debt resolution/settlement can be a viable option.

Do not neglect to ask for information on results

Request the statistics on a company's success rates, and rates of those consumers who do drop out of the program. A poll of National Foundation for Credit Counseling (NFCC) members found that only 21 percent of repayment plans were completed. The rate of completion for confirmed Chapter 13 bankruptcy plans is only 33 percent. Debt resolution/settlement completion rates, however, have been reported at 35-45 percent. Reviewing these rates is important, as it provides an indication of how the company is able to structure resolutions and payment plans for its clients.

Do not work with a company that charges for educational information

Find out if the provider offers educational material, including budgeting and money management counsel, free of charge. This is an important element of service to the client. Some firms, however, consider educational material an additional fee source, not a benefit to their clients.

Do not fall for a company that doesn’t abide by new FTC regulations

All reputable debt resolution/settlement firms will abide by the FTC regulations, and not require any upfront or monthly fees. Fees should only be paid on the basis of results.


When it comes to getting debt help, selecting a solid partner that will help you is critical. For those who are looking for a trustworthy organization to help win the battle against debt, these considerations will help choose a reputable firm.

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