When you find yourself getting in trouble, many people turn to debt management companies or a debt consolidation company. Sometimes these companies can help you with negotiations of your debt, but sometimes they can dig you into a deeper hole than you first started in.

Do your homework before you start up with their services. Check the Better Business Bureau. Google the company, seek reviews and review them all. Check reviews on Yelp. You want to arm yourself with as much information as possible. Check the state’s Secretary of State to see if they are listed. How long have they been in business? I’d hate for you to start services, pay the company’s fees just for them to close down and not do anything for you.

Before you start, also check with the creditor or collection agency. See what they can do for you. Ask for options, whether for a payment plan or a settlement. Ask if you agree to payment, would they be willing to delete the entry from your credit report once the debt is paid. Don’t let them tell you they can’t do that. If they do, ask them what law states that. There ISN’T one!!! So let them know that you’re aware. Also let them know by them telling you that they CAN’T do it, that you deem that to be providing misleading information. Empower yourself with a little bit of research.

But one thing I would like to stress before establishing any relationships is to ask what they are going to do with the funds that you pay. Too many times I see people who agree with a company. They first pay the fees. Then they continue with their monthly payments until a large enough sum is reached before they will try to work out a settlement. During this time, there could be a lawsuit filed which is the last thing you want. I’d suggest asking two questions before starting:

1 – Can you stop a lawsuit from being submitted?

2 – If a suit is filed and a judgment is entered against me, can you stop its execution?

If they beat around the bush with an answer, it’s apparent that you shouldn’t work with them. More times than not the answer to both questions is no. But if they answer yes to either, ask them to elaborate in great detail. It’s for your best interest.