The Inside Scoop on Debt Settlement Companies - What Your "Advisor" Doesn't Want You to Know

Does this sound familiar?:

"The way our program works is you would be hiring us to negotiate with your creditors on your behalf. Upon enrollment Power of Attorneys are sent out to your creditors and we inform them that your intent is to settle your accounts, and to please contact us only and not our client. We will take all of your unsecured debts and combine them into one low monthly payment. You maintain full control of the funds throughout the program, you know exactly who is being paid off, and more importantly we don't show up on your credit as a third party agency. Then, as funds begin to accumulate in your account, we will negotiate settlement agreements with each of your creditors. One by one, we will settle each of your accounts until all the debts have been satisfied and you're finished with the program..."

If it does it's because you've probably talked to several debt settlement companies already. Debt Settlement is a cookie-cutter industry and the reason you've seen so many pop up in recent years is because it's an easy business model to replicate and relatively fast to get a company out of the red and into the black, it's a money maker; in which here lies the #1 problem. The focus then turns from the clients needs to the company needs; and the goal everyday turns out to be a competition instead of helping clients: It's to sign and enroll as many clients into the program as possible.

So you might wonder then what's the payoff for these so called "advisors" that get you to enroll over the phone? The answer is money - commissions! Let me give you a little background on the hiring process of a debt settlement sales person - note the key word: Sales! This sales person comes guised as many titles: Advisor, Senior Advisor, Debt Specialist, Debt Advisor, Consultant, Debt Consultant, even Debt Counselor. The "advisors" that tend to do well in this industry are those who have either been in the mortgage industry or auto industry. The reason for this is because these people understand credit, credit reports, high pressure sales, and the understanding that the more clients that come through the front door the higher the commissions. The hiring process is simple and involves a couple questions: Can you sell? Are you a closer? And if you make it past those two steps, then training simply involves the memorization of a script. Plainly put - it's a joke. Regardless of what your situation is, they are going to do their best to force a square peg (you) into a round hole (them).

With all that I've said, I'm an huge advocate of debt settlement and have seen it work because it does work. What a consumer needs to understand is however that just because a company is large, has a smooth talker on the other line, and has affilliations and badges on its website, doesn't mean your best interest is at heart. Would you buy the first car you drive? Or the first house you visit? Treat your finances and debt the same way - look at options.

There are other ways to get out of debt other than debt settlement. Find a company that will put you into a program that isn't cookie-cuttered but tailored to your unique situation. Debt settlement should not be confused as a free pass to not pay your bills. If you can afford to pay your bills, then pay them or look into a company that can help you manage your debt. If you can't, then look into debt settlement or bankruptcy.