What You Need To Know About Debt Settlement
What sort of credentials should I be looking for in a debt settlement company?
A strong candidate to provide your debt settlement services should be an AFCC accredited member. Their online reputation should be strong (read- very few if no online complaints).
Their negotiators should be IAPDA accredited…and of course, they should charge NO UPFRONT FEES.
In fact, you shouldn’t pay anything until one of your debts is actually settled.
When do I start saving money in a debt settlement program?
Entering a debt settlement program doesn’t cost anything. You don’t pay until the first debt is settled. The first debt can be settled anywhere from 12 to 40 months after you enter the program. The debt is always settled for less than you owe. We take 40% percentage of the savings. So if you owed $40,000 dollars and we settled the debt for $30,000. You get to keep $6,000 of that and we keep $4,000.
When will I stop getting harassing phone calls?
We have proven strategies to reduce the amount of harassing phone calls. Because the worst phone calls come from collection agencies, we just go to those agencies directly. They know that most people never pay…no matter how many times you call them. So we patiently but firmly persuade them to stop the calls, and discuss your settlement options. They see this approach and take it seriously. They have a fine line to walk, and if it can be proven that they are indeed “harassing” you as, as the law defines it, they are looking at a huge fine.
How Do I Know What Kind of Progress I Have Made in the Program?
We call you each time we settle a new debt- and depending on how much debt you have, it may take a longer or shorter amount of time get the calls. We also do a regular check in every month to see how you are doing, and provide the support necessary to resolve your financial burdens. This includes a regular budget analysis and unlimited customer support.
How Do You Decide When to Settle?
There are a number of factors determining when the best time to settle is- including financial variables, as well as your relationship with the creditor. We proactively monitor the creditor and select the best time to pursue a negotiation.
Does The Program Always Work?
In over 95% of all cases, some kind of agreement is reached.
Most of our clients find it in their best interest to pursue settlement because they don’t have to pay unless it works. If you belong to that 5% that may have a challenging time getting settlement- we tell you that right at the start. In that case, you may be a good candidate for our bankruptcy program.
What Are These New FTC Guidelines I Keep Hearing About?
The new FTC guidelines are a welcome regulation of our industry.
FTC guidelines now prevent debt settlement companies from doing any kind of false advertising.
- This includes “skewing” statistics, or “cherry-picking” success stories to only present positive outcomes.
- It also prohibits debt settlement companies from charging upfront fees or making empty promises.
Debt settlement has now become one of the most heavily regulated industries in the country, ensuring that you, as the consumer, will be protected.
What Does Debt Settlement Do to my Credit Score?
In order to get creditors to negotiate with you, you have to scare them a little bit. This means deferring on your payments until they get the idea that you might not pay at all. Nothing freaks them out more. During that time, they can put negative marks on your credit report. However, the newest items on your credit report matter the most. So after you have settled your debt, you can start adopting healthy financial practices and push all the negative marks to the bottom of the report.
Q. What if my creditors won’t settle?
A. If a debt cannot be settled and instead you must make alternate payment arrangements on the full balance of a particular debt, we will simply remove that debt from the program and recalculate the monthly payment and the fees associated with that debt. You do not pay us fees toward that particular debt if we are unable to reach a settlement on it. This is rare. Most Creditors are reasonable and willing to accept a settlement on a delinquent debt if a legitimate hardship situation can be demonstrated.