TrustedCompanyReviews.com (TCR) is not a debt relief, settlement or consolidation company. We rate companies in different industries based on consumer reviews, BBB ratings, accreditations, and certifications, how long companies have been in business, and amongst other factors. If you decide to use a debt settlement company, it is important to know that these companies are not permitted to charge fees until after a debt gets settled. A settlement company will not make monthly payments to creditors. Instead, payments get deposited into a trust account, and these payments continue to accumulate every month in this trust account until there are enough funds available to offer a settlement. In the end, debt negotiation clients end up saving around 30% of their total debt owed, including all fees, and become debt-free in approximately 24-48 months. Additional downsides of settling debt include: The IRS could construe the savings on a settlement as taxable income. Since creditors don't get paid every month, credit scores can get adversely affected. Accounts eventually are written off and sold to third-party collection agencies, resulting in collection accounts on credit. Late fees and interest can continue to accrue after getting approved for a settlement plan, resulting in balances growing higher before getting resolved. Although it's rare, creditors could even issue a person a summons to collect on a debt while enrolled on a debt settlement plan. Before joining a debt settlement program, it's essential to explore all of your options. You may be able to avoid consumer credit counseling and debt settlement programs altogether by using validation services. The Fair Debt Collection Practices Act, a federal law regulating third-party debt collectors, allows a person to ask a debt collector to send proof of an alleged debt through a process called debt validation. Debt validation requires each collection agency to prove the amount they claim you owe is valid, and provide evidence that they are legally authorized to collect on the debt. If a debt collector fails to provide proper validation or does not respond at all, the collection agency can no longer legally pursue the debt or continue reporting it to the credit reporting agencies. The debt becomes legally uncollectible. Debt validation is not a credit repair service and does not even deal with the credit reporting agencies, but instead, assists the consumer with preparing the debt validation package that gets sent directly to the third-party collection agencies. TCR can connect you with a document preparation service that can assist you with filing the appropriate documentation to request validation of a debt. To be connected to an IAPDA certified counselor call (866) 332-3083 and get a free consultation now.