3 surprising questions to ask a debt relief company
Finding help to eliminate your debt can be a trying process, but the benefits you could gain can be well worth the effort. Debt relief companies typically offer a range of programs to help you get control of your debt. In doing so, completing a debt relief company's program can give your monthly budget a little more breathing room and help shoulder some of the mental load your debt requires.
However, not all debt relief companies are the same, and some have a better reputation than others. While there are many good actors in the space, some companies cross ethical lines by guaranteeing results before negotiating with your creditors or making you pay upfront for their services. Both of these actions are considered red flags when working toward debt relief.
So how do you choose a debt relief company? Asking the right questions can be a critical part of your search.
Find the right debt relief option for your unique situation here.
3 surprising questions to ask a debt relief company
These three questions could play a key role in helping you decide which debt relief company is a good fit for you.
What makes me a good candidate for debt relief?
Asking a debt relief company "What makes me a good candidate for debt relief?" serves several important purposes in your decision-making process. To start, this question forces the company to evaluate your specific financial situation rather than offering a catch-all solution. A reputable company should analyze your debt amount, types of debt, income stability and overall financial picture before recommending a program. Their answer will reveal whether they're truly assessing your unique circumstances or simply trying to enroll anyone who applies.
The response you get also provides insight into the company's credibility and expertise. A legitimate debt relief organization will explain the qualifying factors honestly, including potential drawbacks or reasons why you might not be an ideal candidate. They should outline specific thresholds for debt amounts, debt types they work with and financial indicators that suggest debt relief would be beneficial compared to other options.
And, the answer to this question can help you understand what success might look like in your case. The company's explanation of what makes a good candidate should include realistic timelines, expected outcomes and alternative approaches if their program isn't the best fit for your situation.
See which debt relief programs are available to you here.
What is your track record?
Asking a debt relief company about its track record reveals the company's history of success and failure with clients in similar situations. A reputable company should be able to provide concrete statistics about their average debt reduction percentages, program completion rates and typical timeframes for clients to become debt-free. These metrics help you set realistic expectations and determine if their promises align with actual outcomes.
The response you get also offers insight into the company's experience and industry standing. Established companies should readily share information about how long they've been in business, the total debt they've helped resolve and any industry accreditations or memberships worth noting. If they hesitate to provide this information or offer only vague assurances instead of specific data, consider it a potential warning sign.
This question can also uncover any history of regulatory issues or consumer complaints. A trustworthy company will be transparent about any past problems and explain how they've addressed them, while predatory companies might deflect or provide misleading information to hide a problematic history.
Do I need to be employed?
In most cases, having a job is not a strict requirement for enrolling in debt relief programs. However, your employment status can significantly impact your options and approval chances for certain programs, so it's important to ask about how your employment status could impact your options when talking to debt relief companies.
In general, debt relief companies primarily evaluate your ability to make consistent payments toward your debts, meaning that you need to show that you have income through a reliable source, whether that's employment, self-employment, retirement benefits, disability payments or another steady income stream. Having no income whatsoever, though, may limit your eligibility for certain programs — particularly debt management plans or debt forgiveness, as these typically require you to demonstrate some capacity to make regular payments.
The type of debt relief program also influences the employment requirements. Bankruptcy, for example, doesn't necessarily require employment but does involve a means test and evaluation of your financial situation. Credit counseling services are generally available regardless of employment status, though their effectiveness may depend on having some income to work with.
The bottom line
Asking the right questions of prospective debt relief companies will help you identify a firm's strengths and weaknesses in handling debt like yours. Pay close attention to how they respond to your questions, what information they provide and which details they leave out. Once you have all the information you need, take a minute to examine it and decide if the company is right for you. If you aren't sure if the company is the right fit, go with your gut, says Leslie H. Tayne, founder and managing director of law firm Tayne Law Group. "When debt is managed appropriately it becomes a successful process," Tayne says. "Go with your gut. If someone is making you guarantees or promises or asking for money upfront, those are red flags to run from."
