Posted on June 30, 2009 at 7:16 am Does anyone know where I can find debt reduction consumer reports and do you think I can trust them?

Posted on June 30, 2009 at 7:42 am Are you looking for a debt settlement company right now? I think it is tough to find a company off of consumer reports only because everyone's financial situation is so unique. So, just because a consumer gives a good report on a settlement company, it does not necessarily mean you would even qualify for such a program. And, on the flip side of that coin, someone who gives a bad report may be misleading people who are good candidates for debt settlement.

Posted on June 30, 2009 at 8:08 am I am shopping around right now. Some of the debt reduction consumer reports have been pretty scary! It seems that a lot of times these programs don't work out for people. Why is that?

Posted on June 30, 2009 at 12:25 pm Yes, it is true that there are a lot of negative debt reduction consumer reports out there. And there is no denying the fact that some debt settlement companies do not do a good job explaining all of the details to people who sign up (I.e. settling your debt hurts your credit score). However in my time in the settlement industry, I also know that a lot of people would sign up with a company knowing full well what the potential reprecussions were of debt settlement. But, because of the fact that they didn't listen well, didn't communicate with the company or felt that they didn't need to be engaged at all during their program they felt unsatisfied and unjustly scrutinized the organization that was trying to help them become debt free.

Posted on July 9, 2009 at 4:19 am Where did you say you've read the scary debt reduction consumer reports? Actually, I've a question, is there a centralized body for this?

Posted on July 9, 2009 at 4:29 am I think he got it from the article in the Consumer Reports website. It's not very supportive of the debt settlement business, but it did not give it a bad review either. The Consumer Reports article advice consumers to take the do- it -yourself debt settlement route instead.

Posted on September 1, 2009 at 11:18 pm Since the debt settlement industry is still in its early stages, I expect that the debt reduction consumer reports would change over the years, not necessarily to pro-debt settlement, but at least the negative reports would be challenged by the more positive ones. A variety of opinion about an industry is a sign of its good health or vitality. Opposing views on it, is better than just purely negative ones.

Posted on September 1, 2009 at 11:28 pm What is it about the debt settlement industry that the debt reduction consumer reports find very disagreeable?

Posted on September 1, 2009 at 11:44 pm Steven already mentioned the effect that debt settlement has on the credit report. Negotiation requires for the consumer to completely stop paying the creditors and instead save up or build up enough funds for the settlement later on. This affects the FICO score. That's one.Another thing that bothers the debt settlement industry detractors and one that's related to the first issue is the fee structure. I am not a debt settlement industry expert but from what I know, most companies will charge the consumer 15% of his/her total debt amount.Another fee structure is to charge a percentage of the settlement amount (usually 20-25% )and might also require a one time payment up front. That's why it's important for the consumer to ask (or for the settlement company to explain) whether or not they break down their fees into a "retainer" fee and a "service fee." The reason is that, companies that charge 15% of the total debt amount may break that into a  5% (retainer fee) payable within the first few months and then the remaining 10% (service fee) over the next 15 months. This structure confuses some consumers as they wonder where their monthly payments go if not to the creditors. Again, in the first few payments, using the fee structure mentioned above,  are for the fees and may not be saved up or used for the first settlement.

Posted on September 2, 2009 at 12:45 am One way for the consumer reports (on the debt reduction/settlemnent industry) to improve is for settlement companies to really explain to the consumer their fees and the credit report (with the FICO score breakdown). A debt settlement appears on the credit report as "settled", "settled for less than the full balance", or "settled in full." Here's a breakdown of the FICO score. See which segments are affected by debt settlement (when consumers have completely stopped payments to the creditors and when finally, all accounts have been settled)-35% Payment History - 30% Amount Owed-15% Length of Credit History-10% New Credit-10% Types of Credit Used