Many people find themselves in trouble with excess debt at one point or another during their lives. Sometimes we can work through it on our own; sometimes we end up dealing with a bankruptcy. But what can you do if it's more than you can handle by yourselves, but you really do want to avoid bankruptcy?
There are hundreds of companies out there claiming to help you deal with your debt. There are many more that make outrageous claims via ads sent to your e-mail inbox. Some of these companies are outright scams. They claim that if you will pay them a "nominal" fee up front, they will negotiate with your creditors to help reduce your monthly payments. However, plenty of people find that they pay that nominal fee, and then nothing more is ever done.
Does that mean that you can't find an honest company out there? Not at all! Certainly there are honest and reliable companies; you will just have to do your research to find them. This is one area where that homework can literally save you a lot of time and money.
- Check out potential firms with organizations like the Better Business Bureau. The United States Department of Justice also has a pre-approved list that you can start with. There are certainly other valid, honest organizations out there, but the Justice Department's website is at least a decent place to start. You may also find recommendations from your local newspaper or other similar source. Regardless of where you get the information to help you choose a firm, it is still a good idea to make sure that your potential firm is still in good standing with the Better Business Bureau.
- Once you've narrowed it down to a couple of firms you feel you can trust, don't be afraid to call them and find out how they work. Different firms operate differently and they may go in totally opposite directions. Some may be more active in working with your credit card companies; others may focus their efforts on helping you get your spending under control. Others will look at the big picture and work through multiple areas. You should work with a company that's thorough and one that you are comfortable with. Otherwise, the process may not be as effective as it could be.
- Now that you've chosen a firm, you MUST be honest with them. They are trying to help you and if you are less than honest, whether because you're embarrassed or because you're unwilling to admit to some bad spending habits, you are going to sabotage the process. Their job is to be on your side and help you get your bills back within your budget - without filing bankruptcy. Being less than honest only sets the whole project up for failure. Then neither side is satisfied with the outcome. Be honest, provide all the information that's asked for and follow through with the recommendations.