A debt settlement company won’t tell you these 5 critical things, and with good reason. The reason for that is mainly profit because if you don’t engage with their services they are not getting paid, so there is an easier, softer, less informative approach that is taking to sell people on the idea that selling is a good idea for them to avoid bankruptcy. So lets get started.
“Some of your creditors refuse to work with debt settlement firm”
The fact is some creditors won’t deal directly with a debt settlement firm. What happens when creditors do this is you are required to let accounts go more delinquent than might have been necessary. So when there is something the company is not telling you that some creditors are not going to work with them. They actually can be impeding your ability to succeed or save the most with settlement or settle earlier so that there is less of an impact to your credit report. So it is a key thing to not share that information with you.
“The debts of the company will probably not tell you that they have to wait for some accounts to charge off before trying to settle even though that could cost you more”
What do I mean by that? Well, if a debt settle in a company tells you that they are going to have to wait longer than may have been necessary to settle an account, what they are not telling you is that because of number one where some creditors are not going to work with them. It forces them to have to deal with the debt collector. Debt settlement is a very predictable process. It is why the entire industry exists and by predictable when it comes to number two your creditors charge off debts. It is actually part of the counting principle that they have to abide by. When they do that they do one or three things. They send it out to a debt collector just a regular old debt collection agency that gets paid when they are able to get you to pay them or they will sell that debt to a debt buyer, an investor, somebody who is risking their money thinking that they are going to get more back when they collect from you, or they are going to send it to an attorney and that attorney is gong to collect part of that collection might even involve suing you to get you to pay.
When a debt settlement company fails to tell you that some of their creditors, your creditors are not going to work with them and they don’t have to wait for a debt collector to get the account before they can actually settle it for you. They maybe costing you 10/15% more or even higher and the settlement arrangement, so it will cost you money. For example, one of the major national credit card issuers currently working with some of the members are seen 25 and 30 cent on a dollar settlements. Those same accounts once placed with a debt collection agency or sold off to a debt buyer or placed with an attorney gets settled by a lot of people in the companies in my industry at 45%/50%. Wow! I mean this could actually mean double the amount of money that you could haves settled the debt for.
“You can settle debts on your own and, sometimes, get a better than we can”
Well I just talked about that as part of #2 but I want to hit just a little bit harder so that you actually grasp what I am saying. When you worked directly with your creditors and they are not working with another company or maybe they will even work with a debt settlement company. Often times, my industry gets pigeon hold. Why? Because the way most of my industry operates. You pay money into a special purpose account an Escrow fund every month and you will let that money accumulate over 7 months and in over 7 months you got enough money now to go settle a debt. However, if you engage with your creditor before they charge off the account then you are able to settle at that lower savings often that is available to get settlement companies until it gets out to collection land and you can get terms so where your saving up for 7 months for the settlement company that settle it in full you might be able to settle direct with one of your banks and get 90 day terms. So you got $10,000 account let’s say you settle it for 3,000 and they only need a thousand in the first month, a thousand in the second month and a thousand in a third month. So you are able to budget and save and settle that debt and save $7,000 and spend 90 days doing it. Whereas hiring a debt settlement company you might have missed that opportunity.
“If we weren’t charging you much such high fees, you could actually be out of debt faster”
Well, that is pretty self explanatory because if so many fees are high it prevents you from settling the second debt, the third debt, the fourth debt because most of the time debt settlement works like this. You save up money. As soon as you have enough to settle one account you settle it. The company grabs their fees. You save up money again. Start over another 6 or 7 months adding money to an account every month and as soon as there is enough settlement debt companies settles for that and collects their fees. Those fees actually prolong how long it takes you to finish them so you are not going to hear them talk about that. You are not going to hear them talk about how you can do this on your own. You are not going to hear them talk about some creditors are not even going to work with them forcing accounts out to a third party to settle for higher rates all because of fees and it is the biggest bone that I have to pick with my industry since we create a Consumer Recovery Network back in 2004 our fee has been 15% of savings charged after the fact when we do the settlements. Most of the settlements get done by our members themselves therefore there is no 15% of savings. But my industry thrives on that fee structure. They are not telling you that this can happen so much more faster because and I guess sign up with them. They are not going to be able to stay in business so fees matter. Just because CRN’s fees are the lowest in the industry historically it doesn’t mean that there aren’t good companies out there doing similar things. There are a couple, unfortunately most companies charge either about 18 to 25% of your enrolled debt so if you have $50,000 worth of debt their fees 20% of that. I paid over time. Obviously that affects your ability to finish them or succeed with them. Or they charge a percent of savings like CRN does only those fees are 30 to 40 and sometimes even 50% of savings. Believe me fees matter in debt settlement.
“You are a good fit for our program, but bankruptcy may still be a better and less expensive option so go ahead and speak with an attorney before committing to enrolling in our debt settlement program”
Well, that is pretty self explanatory as well. You’re a captive lead that is what the industry refers to you as when you are on the phone with a debt settlement sales person. So the last thing they want to do is recommend you connect with anybody else let alone an attorney where you might learn that bankruptcy is probably an option too because anybody that is looking at that settlement is looking at it as an alternative to bankruptcy and I get it bankruptcy want to avoid it. It is understandable, but might be the right thing to do. So hearing from somebody that you should go and talk with somebody else about your situation and there might be a better answer that is consistent with you getting that debt for the least amount of cost and the quickest way and consistent with your goals for yourself, fresh start example through chapter 7 bankruptcy, you are very rarely going to hear that. You need to research all your options and you are hearing that from me and I am a debt settlement guy. So if you are ready to place where you can no longer afford your monthly bills it is a process of elimination and it involves checking up 3 intervention options. 1) credit counseling; 2) debt settlement and you should always talk with the bankruptcy attorney and find out what your qualifications are for Chapter 7 and weigh those three things and then make a decision. Talk with reputable companies that have built a rapport, that are going share the details beyond these five things, but these five things are very important for you consider and that is why I am writing here.