Debt Settlement FAQ »
How is your debt settlement program sold?
It is important to explain and present the program honestly. Debt settlement is a great program and saves people a lot of money and helps them avoid the lifelong stigma of filing bankruptcy, but is not a monthly payment plan (that would be debt consolidation). Here are a couple of key points that need to be disclosed to the client before the person signs up:
- The person will not be making payments to the creditors and their accounts will go delinquent. While we make contact with the creditors from day on and work to settle the accounts as best as possible based on the funds available, there are no guarantees. It is not a $300 a month for 46 months payoff plan such as would be with a debt consolidation loan. The creditors are still charging late fees and interest. But, with some funds available on a monthly basis, and the more the better, we are normally successful in reaching great settlement with the clients´ creditors.
- The clients may be sued. While less than 1% of our clients have an active lawsuit at any time, a creditor always has the right to file a lawsuit to assert their claim that the debtor owes the money. If there is a lawsuit, there are options such as a legal answer (to stall and give more time), a long term payment plan (payment on the full balance), or a lump sum settlement (normally at a discount).
- We charge a % commission based on the savings (on a lump sum settlement), or in the case a client accepts a long term payment plan (payments on the full balance), we charge a commission based on the debt. In most cases, the settlements take the form of a discount off the full amount, but sometimes a long term payment plan is appropriate to stop a lawsuit or pending legal action.
- There are no guarantees. We have seen many companies closed by the FTC and the marketing company as well as the negotiation company closed and fined due to making promises. No one can predict the future with regards to debt reduction and instead of trying to do so, we charge a percentage of the savings so that the clients know that their best interests are foremost for us.
What are the requirements for the debt settlement program?
- The program must be correctly explained per the points above. Before officially allowing any client to enter, we review the points above in the form of a checklist to make sure the client has a realistic expectation of the program. This helps protect all parties. When the clients get what they are expecting, they are much happier and you have much more peace of mind and long term stability.