Key Takeaways
- Ask about fees, timelines, risks, and credit impact before signing.
- Get answers in writing.
- Compare multiple companies.
The questions you ask before hiring a debt relief company can save you thousands of dollars — and years of damaged credit. Legitimate companies welcome these questions. Evasive answers are your signal to walk away. Print this list or keep it open during the call.
This article is for general educational purposes and isn’t personalized financial advice.
About the Company
- What is your full legal name, and where are you located?
- Are you licensed in my state? Ask for the license number and verify it with your state regulator.
- Are you a nonprofit or for-profit? For credit counselors, ask about NFCC or FCAA membership.
- How long have you been in business?
- Have you faced any enforcement actions or lawsuits? Verify independently. See where to check complaints.
About Fees
- What are all your fees, and when are they charged? Get the answer in writing.
- Do you charge anything before settling a debt? For settlement services sold by phone, upfront fees are generally illegal. See upfront fees in debt relief.
- How are fees calculated — a percentage of enrolled debt, or of savings?
- Are there fees for the dedicated savings account?
About the Program
- Is this program right for my situation? A good company asks detailed questions about your income and expenses.
- What are my other options? Legitimate firms mention alternatives like debt management plans and bankruptcy.
- How long will the program take?
- What percentage of clients complete the program?
- Which of my creditors don’t work with you?
About Risks
- How will this affect my credit?
- What happens if a creditor sues me?
- Will forgiven debt be taxable? See is debt settlement taxable.
- Will collection calls continue?
About Your Money and Contract
- Who controls my savings account, and how do I withdraw?
- How do I cancel, and what refunds apply?
- Can I see the full contract before signing?
Answers That Should Make You Walk Away
- “We guarantee results.”
- “There’s a government program to erase your debt.”
- “Don’t worry about your credit.”
- “You need to pay a fee to get started.”
- “You have to sign today.”
See how to spot a debt relief scam.
Frequently Asked Questions
Should I record the call? Take detailed notes. Recording laws vary by state, so ask permission if you record.
What if the company won’t answer in writing? Treat it as a red flag.
Do these questions apply to credit counselors? Yes, most of them, especially about fees, accreditation, and alternatives.
Where can I get unbiased advice first? A nonprofit credit counselor. See how to find an accredited agency.
Example: Questions That Reveal a Lot
A borrower asks a company: What are all fees and when are they charged? What happens if I cancel? How long until the first settlement?
A reputable company answers clearly and provides documents. A vague or pushy answer is a warning sign.
Figures are hypothetical and rounded, for illustration only. Actual rates, fees, and outcomes depend on the lender or provider and your credit profile.
Frequently Asked Questions
Should I ask about lawsuits?
Yes. Ask how they handle creditor lawsuits.
Can I talk to a counselor first?
Yes, nonprofit counseling can help compare options.
Is a contract required?
Yes. Read it carefully.
Next step: ready to compare your options? Read Real Reviews vs. Fake Reviews: How to Tell With Debt Relief Companies.
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