Debt settlement companies can genuinely help — but in a stressful situation it’s easy to trust the loudest promise. Here is how to tell a trustworthy adviser from a risky one.

Promises that should worry you

  • “Guaranteed 70% off your debt.” No one can guarantee what a lender will accept.
  • “We will clean your CIBIL score.” Accurate information can’t be legally removed.
  • “Recovery calls will stop immediately.” Negotiations don’t automatically stop collection; harassment can be challenged, but the debt remains.
  • “RBI approved”. Debt relief consultancies are not RBI-licensed lenders, so be careful with claims of RBI approval.

Questions to ask before you sign

  1. What exactly will you do for me, and what won’t you do?
  2. What are your fees, when are they payable, and are they refundable? Get this in writing.
  3. Who pays the lender — and into which account?
  4. How will settlement affect my credit report?
  5. What happens if a lender refuses to settle?
  6. Who will be my point of contact, and how will you update me?
  7. Can I speak to you before any offer is accepted on my behalf?

Fee red flags

  • Large upfront fees before any review of your accounts.
  • Fees that aren’t written down, or change after you sign.
  • Being asked to send the settlement amount to the company’s account instead of the lender’s.

Protect your data

Share documents only when you have decided to work with a firm, and never share your OTP, PIN, net-banking password or full card number with anyone.

How SettleWay works

We explain trade-offs before you decide, put our fees in writing up front, and recommend paying lenders only against a written settlement letter. We are not a bank, lender or law firm, and we don’t guarantee outcomes. Read about our principles or book a free consultation.