Knowing exactly how much you must pay the company to provide you with financial assistance is important when searching for debt settlement services. These services aren’t free, but it is important to know and understand the billing structure. A majority of companies charge a flat fee, typically based upon the percentage of your debt. Make sure, however, the fees are only tied down to results and not the overall percentage. You don’t want to pay for services that don’t actually reduce your debt. Result oriented fees are the most beneficial, as you don’t pay for any services unless it substantially helps with your debt situation.
Ask about if the company is debt settlement services are able to stop creditors from calling you, because undoubtedly you have received your fair share of phone calls. The answer to this question is no, it is not possible for them to stop calling you, so if they say otherwise, proceed with caution. Creditors may be less likely to call you, as they start receiving payments, but outside of this, they probably will continue to hound you. Due to this, be careful with dealing with a debt consolidation service that says it can prevent such actions.
Ask about the ability to be sued by debt collectors. A company may say it is not going to happen to you, and although the company is generally right about this, it is still possible for you to be the target of a lawsuit, looking for settlement money. It is a possibility, so make sure to ask and see what the service provider’s answer is.
It does take some time for debt settlement companies to work out deals with the debt collectors. Collectors don’t want to lose any money, while the debt settlement services want to cut as much out of what is owed as possible. This does create a bit of a stalemate, but shouldn’t take more than a few months to start receiving results. The company probably can’t give you an exact time frame, but a ballpark figure is important. If you fail to see any results within 12 months, your settlement is not being handled adequately and should be taken to a new service provider.
Ask about possible tax repercussions. The IRS does consider forgiven debt as actual taxable income. It may be possible to have the taxes waved, if you can prove you are insolvent to the IRS. The debt consolation service in question should explain this to you in further detail and provide necessary assistance.