If you're considering using debt settlement to help you pay off your credit cards, here are 5 tips to help you decide on a company to help you.

Keep in mind that hiring a debt settlement company is no different than hiring any business to perform a service for you - so make sure you find the one that fits your needs the best. Not all debt settlement companies are the same. Like with any industry, there are good ones, and there are the rest.

Unfortunately, when it comes to settling credit card debts, you often hear more stories about people who complain than those who receive good service (and there are many).

How do you determine which settlement company will offer you the best service?

1) Shop around

When hiring a settlement company, you should contact at least 2-3 different businesses and compare the services and terms they offer. Not only will you find the best company to represent you, but you will learn a lot about how debt settlement works, and how it can help you.

2) Check with the BBB

While not everyone with a complaint contacts the Better Business Bureau (so a clean record may be misleading) if there are several unresolved complaints, that is a "red flag" to find out why there are unhappy customers. If the complaints have been resolved, that is a good sign that the debt settlement company offers good customer service. You can search for company records online at www.BBB.org.

3) Check references

While debt settlement is a confidential process, and therefore you may not find many companies willing to give out names of happy customers, it is worth asking. Talking to a former customer will tell you more about a company than any brochure or website.

4) Get all the details in writing first

This is an absolute MUST - you should never agree to anything, sign any paperwork, or send in any money until you get all the terms and conditions in writing. A written contract will help you understand what service you should receive, how much it will cost you, and protect you if an issue comes up.

5) Ask lots of questions

If you have any questions (and the more settlement companies you talk to, the more questions you will have) make sure to ask them - and get the answers you want. If a company is not willing to take the time to answer your questions now, how will they respond to you once you become a client and your money is at stake?

Bottom line, it is your responsibility to "do your homework" and research the best company to help you settle your debts.

If you take the time and effort to find the company that will fit your needs the best - just like you would when hiring any professional - you will greatly reduce the chances of a major problem occurring.

Settling your credit card debt is a big decision for anyone to make, so don't make the decision lightly!

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Once you have fallen into the debt trap it is very easy to see them accumulating. It is essential to manage your finances properly and take steps to pay the debts off before they leave you bankrupt. This daunting task leaves many people confused and they resort to any help possible. Debt services are very popular and claim to provide you with good debt solutions. But it is your responsibility to check the credentials of the service, whether they are legit and even if they are really advantageous to you. Some common mistakes committed at this juncture are:

Hiring The Wrong Service: Sometimes people blindly follow an advertisement and place their hope in a debt service that may be of no use. And then they realize this blunder only after some months. This is generally seen when the points mentioned in the advertisement are very vague. A person desperate for help may easily fall into this trap. Thus it is absolutely imperative to check the past history of the service as also the terms and conditions whole signing the contract.

You should remember that Debt Settlement agencies can only act if your debt has been passed on to the debt collection agency. These settlement agencies refrain from getting in touch with the collectors and stay mum till your debt reaches the collectors, resulting in a loss of time and money.

Debt Consolidation agencies are more proactive and keep changing their decisions. They may even revise some of the payment terms through direct contact with the lenders. They sometimes suggest consolidating your loan to reduce the monthly installments. It is a must that you keep track at all times and ensure that you can meet the required demands. Else you may end up in a bigger mess.

Hiring Expensive Services: Before registering with a service, it is important to deliberate over the fees they charge to get the work done. You need to consider their costs and the amount they will be reducing the debt by. It seems useless paying an advisory firm exorbitant fee when the same advice can be got through the internet free of charge.

Scams and Useless Services: Always make a thorough study of the service firm. Try to check with past users and their experiences. Approach a firm with good credentials. Be aware of frauds and scams which are available in plenty. Refrain from paying any amount before the service is provided. Confirm the extent of the aid provided or whether they will only advise you and you will have to perform all the work. Before registering be absolutely sure of what you are getting into.

These are certain aspects to be checked before hiring a debt service agency.

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Debt collection is the act of obtaining payment from customers for credit-made purchases. It is a thoroughly cumbersome process for most businesses, thus an efficient and effective system of overdue accounts collection must be a major priority - especially by small businesses.

For many small business operators, debt collection is the most unpleasant task of all - keeping tabs on overdue accounts can be very complicated, and pressing people over financial matters is not particularly enjoyable. But more than the large businesses, it is the small ones that must establish appropriate collection systems - else, the company itself is endangered financially.

Simply out of ignorance, small businesses write off great losses because they do not realize that collection agencies can be economical in the long run. Hiring collection agencies - instead of simply relying on the accounts receivable clerk to act as a collector - will not only save time but finances also. Bad debts - money owed that appear impossible to collect - are a collection agencies target.

Small businesses have also this mindset that only large businesses can afford collection agencies. A business must have growth in mind, and taking steps the way your larger competitors do is one of the first steps for that. Plus, most of today's collection agencies are small business friendly. The mere fact that you have employed the services of a collection agency improves your company bottom line significantly.

Search for a collection agency offering various collection amount levels. One reason why small businesses do not employ collection agencies is because of the notion that the debt owed to the business is trivial to large collection agencies. No debt is too trivial, especially when it is a bad debt.

Make sure that a particular collection agency works within the law.

The debtor must not be unduly harassed with late night or early morning phone calls, or your business will be assaulted with lawsuits. Collection agencies must comply with strict laws, and must be one to use brains more than brawn. Four strategies are mostly used in debt collection - letters, direct contact through telephone, notification to credit reporting bureaus, and litigation.

Collection begins with a series of three notification letters sent to the debtor, most often called demand letters. The third letter is a warning to the debtor - if the outstanding debt remains unpaid on a certain day, the debtor's name or company will be reported to one or all of the big credit-reporting bureaus.

This warning often prompts immediate action, as unpaid debts on a credit report are a blemish on one's financial reputation. Reports of unpaid debts may, after all, lead to a denial of credit in the future. When all else has failed, litigation is employed as the last resort.

Small businesses operate on a much tighter budget, and a delinquent account or two can halt the growth of the business. Collection agencies are more needed to ensure the growth of the company. Tracking down debtors is frustrating and tedious - for the collection agencies, it is what they do best.

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Creditors often wonder when they should place an account with a collection agency. Accounts should be placed with a collection agency if an account is 90 days delinquent and you have received no response from the customer.

About 120 days after the invoice date a number of statements, collection letters and calls have already been sent out. If you have tried to bring the customer's attention to the delinquency and the customer has not responded this indicates a cash flow problem, a show of bad faith, or a lack of concern. Your best chance of collecting the money owed is to place the account with a collection agency that is certified.

There are some occasions where you should place an account with the collection agency before 90 days. When a customer has broken promises of payment or indicates and inability to pay, this is a cause of concern. Consider calling a collection agency if you have been promised payment but have not received any checks. Also, call a collection agency if the customer says they are unable to pay their debt and refuses to initiate a payment schedule.

A customer may repeatedly ask for certain documentation that was already sent. This is commonly done when a customer wants to delay paying on their account. Also, if a customer says they will take care of their account but will not establish a payment schedule this could indicate a cash flow problem and the account should be sent to collections.

There are other signs to watch for as well. If a customer relocates without notifying you of a change of address or denies that they owe you money are two reasons to call a collection agency. If a customer refuses to pay because they are disputing the quality of your service or product may also be cause to call a collection agency.

When you are choosing a collection agency, make sure to follow a couple of key guidelines. First, find out if the agency you are thinking of using is a member of an organization such as the Commercial Law League of America. Organizations such as these require members to be ethical and understand laws such as The Fair Debt Collection Practices Act.

Inquire about the collection agency's average recovery rate and ask for references. Contact the references they give you and ask them the amount of time it took for the agency to collect on delinquent accounts, if they collected the debt in full, and if they were pleased with the service.

When running a business it is quite easy to extend too much credit, especially when you are trying to attract companies to your business. Be careful because if you extend too much credit this may lead to accounts that are unpaid and this will limit the cash flow that you need in order to build your business. It is important to keep abreast of any overdue accounts because over time, your chances of collecting the money owed decreases sharply.

Check all credit references carefully for your new accounts and don't offer more credit than your company can deal with.

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Imagine a situation in which you are a New York business owner selling large or luxurious items which you provide financing for when your customers need assistance in purchasing. You give the customer the item, and they in turn sign a contract promising to pay for the item at a future date or over a period of time.

This consumer may make a few payments to you as promised, but then, they stop. You have their address and telephone number so you give them a call or write them a letter asking for payment (all on your own time while you're not selling). Even if you hear back from them promising payment, this renewed promise is only as good as the original, which obviously was not taken very seriously by this consumer to begin with. Maybe the phone number is disconnected or they have moved. What now? Why bother?

Hiring a debt collection law firm will not only allow you to continue with your main business, but the firm also has professionals that specialize in obtaining payment. The firm can find "lost" customers, arrange for alternative payment plans or even file lawsuits on your behalf. Receiving a letter from a debt collection attorney threatening legal action can produce comparatively better results than a letter from a small merchant.

Plus, all of this can be done without interruption to your regular business. Hiring a debt collection law firm to collect your bad debts is like hiring an accountant to do your taxes. Sure, you can sift through the entire tax code and figure out how to avoid being audited, but you may not realize all of the tax benefits you are entitled to. So, now you have read the entire tax code on your own time, away from you business, and the result is probably not in your best interest.

The same is true of hiring a debt collection lawyer. Hire a debt collection attorney that has already "memorized the tax code" so-to-speak and is working for you around the clock while you continue to operate your business.

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