How to Find a Reputable Debt Negotiation Company

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Now, more than ever, record numbers of consumers are turning to debt management services during times of financial distress. But, as a consumer, how do they know what service is appropriate for their particular situation and how will they know which company they can trust to help them?

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It was a long time in the making and we are very proud to encompass the best in the industry.

Now, more than ever, record numbers of consumers are turning to debt management services during times of financial distress. But, as a consumer, how do they know what service is appropriate for their particular situation and how will they know which company they can trust to help them? USOBA can provide them with referrals to its accredited member companies. http://www.usoba.org

There are three major options when looking for debt relief assistance: Credit Counseling, Debt Negotiation and Bankruptcy.    

Credit Counseling: Provides budget analysis and education related to debt. Negotiates with creditors, or has a pre-determined amount of concessions that creditors will receive in terms of lower interest rates, write-offs of late fees and/or other penalties. Will then receive and disburse funds to creditors on a monthly basis.

Debt Negotiation: This option is a half way point between credit counseling and bankruptcy. When consumers cannot afford a credit counseling program or do not qualify for credit counseling and do not qualify for bankruptcy or do not want to file for bankruptcy, debt negotiation may be the best choice.

Bankruptcy: There are several variations on bankruptcy, most common are:

  •      Chapter 7 - A bankruptcy option in which a bankrupt firm is liquidated after the courts have determined that reorganization is not worthwhile. A trustee is charged with liquidating all assets and distributing the proceeds to satisfy claims in their order of priority.
  •     Chapter 11 - A bankruptcy option in which a trustee is appointed to reorganize the bankrupt firm. Although the existing claims of security holders are likely to be reduced or replaced with different claims, it is expected that the firm will continue operating. Both creditors and owners must vote approval of the plan before the reorganization can be confirmed by court action and become effective
  •     Chapter 13 - Chapter 13 generally enables a person with regular income to stop his creditors' collection efforts while he pays his debts. Unlike a Chapter 7 bankruptcy, which requires a person to give up much of his property and assets to discharge his debts, subject to certain exemptions, a chapter 13 bankruptcy allows that person to keep his property and assets while he takes more time to pay his debts.

With credit counseling and bankruptcy, there are a number of entities that can verify good business practices, accreditation, certification and government approval. What avenues does a consumer have when attempting to locate a reputable debt negotiation company? Until now, there were none.

The United States Organizations for Bankruptcy Alternatives (USOBA) launched the first accreditation program for the debt negotiation industry. USOBA’s members are debt negotiation companies that seek to provide consumer assistance with honesty, integrity, and protection. The membership spent a great deal of time drafting the USOBA Best Practice Standards, from which the USOBA Accreditation Program was created.

“There is a great need in our industry for a referral system that could point consumers to a legitimate company that has been audited to best practice standards”, comments Jenna Keehnen, Executive Director of USOBA. “It was a long time in the making and we are very proud to encompass the best in the industry.”

With over 70 members nationwide, USOBA is by far the largest collective voice for the bankruptcy alternative industry. From its onset the USOBA membership expressed a desire to better the environment of the industry and they chose self-regulation as their avenue.

“USOBA has developed a good set of best practices,” commented Tom Shelley, VP, Marketing for BSI Management Systems. “The best practices include ensuring companies are not engaging in any misleading advertising; that they clearly explain upfront to consumers the costs and timescales, and include this in the agreements, communicate regularly with consumers and much more besides. What is even better is that the requirements have been written in unambiguous and therefore auditable terms. This means that BSI can truly verify that each accredited company is really doing what they should be doing.”

Consumer Tips from the USOBA Membership:

1.    Research all debt relief options, each available choice is may not be appropriate for every consumer’s situation.

2.    Ask questions! Make sure that the company being interviewed is forthcoming with answers to all of the consumer's questions.

3.    It is important to understand that each option could potentially impact the consumer's credit rating and/or their taxable income total. Examine and understand these issues prior to making a decision.

4.    If it looks questionable, sounds too good to be true and doesn’t feel right, walk away! It is vitally important that the consumer is comfortable with the service provider they choose.

5.    Finally, check up on the service providers being shopped. Do they belong to the groups they claim to belong to? Does their local Attorney General’s consumer protection office have complaints? A little background checking can go a long way when making important financial decisions.

To find an accredited debt negotiation company please feel free to contact USOBA via email: info @usoba.org. To find a list of licensed credit counseling agencies please visit the American Association of Debt Management Organizations at http://www.AADMO.org and click on “Find A Credit Counselor.” The American Bar Association can help you locate an attorney that specializes in bankruptcy in your area by visiting http://www.abanet.org and clicking on “Lawyer Locator”.

About USOBA

USOBA is dedicated to providing its member companies with important industry related information, including compliance requirements, as well as advocating on behalf of its membership for fair and appropriate industry regulation that maintains the utmost in consumer protection.

USOBA members are provided a USOBA State Law Summary guide, the only one of its kind in the industry, to better ensure and promote national compliance. This guide contains the laws and regulations, state by state, and has been reviewed by regulators and legislators.

For further information, please visit the USOBA website at http://www.usoba.org.

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Jenna Keehnen
USOBA
713 290-9029
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