You have decided to take a further look into debt settlement, and you want to find the best debt settlement company you can find. How do you know who is the best? What qualities or features differentiate the best from the rest?

There are a few easy ways to distinguish a really good debt settlement company from the rest. Below, I outline considerations for you to consider so that your debt settlement experience is a good one.


First and foremost, I would recommend that you hire a company that charges by a percentage of the money it saves you, rather than a percentage of the debt you have. Why not hire a company that makes more money when they save you more money? This way, their interests are aligned precisely with yours: to get you out of debt at the lowest possible dollar amount.

Many companies charge 15% of the total debt you enroll in the program. Some even charge 20%. Let’s assume you have $40,000 of credit card debt. In this case, your fee will be $6-8,000.

On the other hand, the better companies charge by a percentage of the savings they are able to negotiate for you, usually 25%. In this case, if the company was able to negotiate your $40,000 down to $16,000, the fee would be $6,000. If they got a better average settlement, they earn more, and if they did worse, they would earn less.

On paper it looks about the same, but who do you think will negotiate harder for you? It’s the company who earns more by negotiating harder. There is no question that you will get out of debt cheaper with a debt settlement company who charges a percentage of savings vs. a percentage of total debt. Over the years as a debt attorney, I have had many clients come to me to clean up a mess created by a poorly-run debt settlement company. I have seen firsthand how much money these companies leave on the table when they are paid by a percentage of total debt enrolled. I have seen these companies negotiate for 50 and even 60 cents on the dollar from the same creditor from which we routinely get 35-40 cents on the dollar.

Bottom line: companies paid by a percentage of debt cave early in negotiations because they are paid the same either way.


Another way to distinguish a great company from an average or poorly run company is to ask yourself who is on the other end of the phone helping me decide if this program is right for me? Am I talking to a qualified attorney, educated in all of the options that might be available to me, or am I talking to a salesperson, paid by the number of people they sign up?

Most large debt settlement companies hire very good salesmen to man the phones. This salesman cannot give you legal advice, which frankly, is probably what you need right now. He has no experience or education in counseling on bankruptcy options, giving tax advice, or responding to a summons or creditor harassment.

My goal, when I meet with a client is to make sure they understand the pros and cons of every potential option they have. This way, my client can make an educated decision that will be in his or her best interest. Would you rather meet with someone who will educate you on your options and recommend your best course of action, or someone who is merely trying to sell you?

I will give you another reason you will get better advice from an attorney, besides education and legal experience: the attorney will be responsible for your case from start to finish. This is huge. Understand that if the salesman enrolls you in a program you are not well-suited for, he gets paid his commission regardless. Do you think that salesperson will be handling the matter if it goes south (e.g. you are sued by a creditor or 2)? That salesperson likely won’t even be around 2 or 3 years later. Even if he is, at that point you are going to need an attorney.

An attorney will give you better advice because he or she knows that the problems if there are any, will wind up in his lap, not someone else’s. There is a higher level of accountability here by design.

There is also a much higher level of accountability for an attorney because if he or she gives you bad advice, you can file a complaint to the State Bar Association. With a salesperson, there is no such regulating entity.

A practicing bankruptcy attorney is a strong choice because no one has more leverage with creditors. Also, a bankruptcy attorney is well-versed in collections law and can stand head to head with your creditors even if they hire an attorney.


One way to spot a plan that is sure to fail is to look for a long-duration repayment plan. In my experience, any plan that is longer than 36 months has a less than 50% chance of success. A debt settlement plan, unlike a debt management plan (where you repay 100% of your debt plus interest) has got to be completed in 36 months or less to be successful.

Your debt settlement company is not paying creditors while you build funds to negotiate. The creditors’ debt collection machine continues to run. This means that interest and penalties continue to accrue, and eventually, if a settlement is not negotiated in time, the creditor will file a lawsuit against you. How long does that take? Typically 12-24 months. Some creditors move more quickly than others.

A skilled debt settlement attorney can prioritize your settlements accordingly so that you are never sued. In other words, if they know that Discover sues in 12 months and US Bank sues at 24 months, they can settle Discover first and then raise funds for US Bank. However, if your plan allows for a 4 or even 5-year repayment, you are likely to be sued by multiple creditors at year 2 when you do not have adequate funds to negotiate. In that case, you will be forced into bankruptcy and all the funds you have spent to date settling debts will have been wasted. This seems to happen all the time. In that scenario, the debt settlement company makes good money on the debts they have settled, but you wind up in worse shape than you were when you hired them!

The takeaway is this: do not sign up for a debt settlement plan of more than 36 months in length—24 months is even better. In a 24 month plan, the probability of successfully becoming debt-free is excellent. Also, because interest continues to accrue before settlement, you will always get out of debt cheaper in a shorter plan than a longer one. For example, suppose you have a $10,000 debt and you reach a 40% settlement with the creditor. If that debt is accruing interest at 20% and you settle it at one year your settlement is $4800 ($12,000 x .40=$4800). At 2 years, the debt has grown to $14,400, and your settlement would be $5760 ($14,400 x .40=$5760). Sooner is always better.


When you are evaluating a debt settlement business, you have a very powerful ally in the Better Business Bureau. As you probably know, the BBB is a non-profit business, whose mission is to protect the consumer from scams and poorly run companies that may hurt you more than they help you. Also, it is there to reward well-run companies that treat its customers with respect and care.

There are 2 things you want to check with the BBB. First, check the rating of the company. It should be A or preferably A+. Second, check the number of complaints filed against the company with the BBB. The best companies will have very few complaints filed against them and the BBB will show that all those complaints were resolved in the customer’s favor.


Most of the worst companies are listed at It takes 30 seconds to run a quick check here.


Online reviews, particularly those on a company’s “Google Places” page may be the best place to see what the company is all about before you hire them. Google Places, like the BBB, is a feedback loop that is not within the debt settlement company’s control. These are independent reviews that you can read and they will likely shed some light on who you are dealing with.


Any good company will be willing to give you some referrals of happy customers. A savvy shopper for a debt settlement service will ask for 2 or 3 references of customers who have completed the program. We give them out all the time. Some company salesmen will say “we can’t give out our customers’ names- this is confidential”—and that sounds legitimate. But truth is, if a company is doing a great job for its customers, they have many customers who tell them it’s ok to use them as a reference. In fact, we have many, many customers who have given us permission to give their name and number to a potential customer.


There are great debt settlement companies out there. Trouble is, that finding them is like finding a needle in a haystack. Every day, it seems another self-proclaimed debt settlement “expert” pops up on the internet. For every scam artist, the Federal Trade Commission puts out of business, 10 more pop up.

However, if you use half the research techniques I outline above, you will have no trouble finding a reliable debt settlement program. If you use them all, you will find the very best companies and can expect great results.

Best of luck in your journey to becoming debt-free!

Written by Stephen T. Craig, Esq.

Managing Attorney

Trident Debt Solutions, Inc.


copyright 2017