Yes, debt resolution / consolidation / negotiation can be an effective means to resolve unsecured debt. Just as each consumer and their circumstances are different, different creditors negotiate debt differently, so it is impossible to say whether debt negotiation will be 100% effective for everyone in all situations.
Here are a few tips to help you choose an effective debt resolution provider.
The American Fair Credit Council (AFCC)is the leading industry trade group in the debt settlement industry. AFCC members are required to follow a strict code of conduct, which is strictly monitored and enforced by the AFCC.
As the AFCC explains, the "AFCC is ONLY for those willing to abide by the AFCC's new Code of Conduct that emphasizes full compliance with the federal and state rules regulating what we do. There is now a bright line between good actors - and bad." USOBA, another debt settlement industry trade group, does not require its members to comply with the FTC rules, such as not charging customers upfront fees, so Bills.com does not recommend any USOBA member debt settlement firms. Don't be scammed by a debt settlement firm that charges upfront fees!
AFCC members must remain fully compliant with the rules issued by the Federal Trade Commission that regulate the debt settlement industry that went into effect in October, 2010. These rules were created to protect the consumer. For instance, anyone now enrolling in a debt settlement program is not required to pay a service fee to the settlement firm until his or her account has been settled. This makes settlement an even more attractive option for the consumer.
Pointedly ask any debt settlement firm you speak with if they are compliant with the FTC rules. If anyone expects you to pay a fee up front, you should look for help elsewhere.
AFCC Mystery Shopping
The AFCC 'mystery shops' its members. Mystery shopping is where the AFCC contacts a member and acts as a consumer. The AFCC then grades the member on how it represents its services. Some debt settlement companies have been barred from the AFCC for failing to meet the requirements of proper disclosure not only on paper, but also on the telephone (which is the most common way consumers enroll).
There are 2 tiers of membership (Regular Member and Accredited Member). Accredited Members must go through a thorough onsite audit (sales, marketing, customer service, negotiations department, HR, etc.) every year conducted by BSI Group to make sure company is complying with the AFCC Code of Conduct, including full compliance with FTC Rules.
Another step to finding an effective debt settlement / resolution company is to determine if the company is an International Association of Professional Debt Arbitrators (IAPDA) member. The IAPDA requires that its members have their debt consultants and account executives pass a certification test that requires them to understand and communicate the pros and cons of debt settlement to their clients.
Finally, learn how long the firm has been in business. A long history is good because a company with long history will have experienced underwriters and negotiators who have demonstrated an ability to negotiate effective settlements with a variety of creditors.
For more information about debt settlement / negotiation and other debt resolution options, see What Are My Debt Consolidation Options?
I hope this information helps you Find. Learn & Save.