Friday, January 7th, 2011
Love them or hate them, Debt Settlement Companies have now pushed their way into the mainstream. This has of course caught the attention of the powers that be, and now there is a rush to regulate these programs. But what are these programs and what do they actually do for consumers? Are they the White Knights riding in to rescue the poor downtrodden consumer, as their commercials suggest? Or, are they they evil, modern day carpet baggers that the regulators claim are robbing consumers blind while making their financial situations worse?
For purposes of this Article, when I talk about Debt Settlement Companies, I am going to be specifically talking about 98% of the Debt Settlement Programs out there. Of course there are always exceptions to the rule and there are a few programs that actually do things very differently and focus on the consumers needs and circumstances.
Here is the typical sales pitch that you will hear from a debt settlement salesman hoping to sign you up into their program. It is your Lucky day Mr. Jones, we have a great solution to your financial troubles. Let me outline the benefits of becoming a client of ours.
1. We will negotiate with your creditors and cut your debt in half.
2. We will give you low, easy monthly payments that you can afford.
3. We will contact your creditors and tell them to stop contacting you.
That sounds like an answer to your prayers. Well not so fast. That is the sales pitch. Let me draw upon a few years of experience helping consumers out of tough financial situations to interpret what the salesman actually means.
1. We will automatically siphon money out of your account every month to cover our enormous fee (usually 15% of your debt).
2. If you are still sending us money after our fee is collected, we will start to set it aside to settle your Debts.
3. Your creditors will not get any money until after we get our fee (for doing what I am still not clear).
4. By making these low payments it will take years before you have enough money to settle the debt and you will likely be sued before you get there.
5. When we send these letters to have the creditors stop calling you it will really increase your chances of getting sued.
6. I only need to fool you for a few months because we will get our entire fee upfront.
These Debt Settlement Companies operate on volume and it is all about sales. In fact sometimes up to 80% of your fee is actually going to the person or group that sold you into the program, not to perform this excellent service that you are led to believe you are receiving.
The concept of Debt Settlement can make sense in certain situations but it is imperative that you educate yourself on the financial strategy of Debt Settlement before contacting a Debt Settlement Company for a free Consultation (Sales Pitch). Most of them earn their money when they sell you into the program not when they solve your problem. If that isn’t a huge red flag, I don’t know what is.
By: Damon Day
Tags: Consumers, Mainstream, Prayers
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Thursday, October 21st, 2010
It is unnatural to reach out and ask for help when things get too tough financially. Most people don’t want to do this and they think that they could better work through their issues on their own. This is mentality that keeps people in debt and it’s something that the credit card companies really rely upon. If more people would reach out to settlement companies and other relief companies, they wouldn’t find themselves in such tenuous situations. With that being said, what do debt settlement companies do exactly to help you get rid of the anchor that’s tied to your finances? How do they rid you of debt?
Starting with the basics
These companies will often help their consumers get down to basics. Many settlement programs allow consumers to meet with people who will walk them through the process of getting out of debt. This is important, because it gives consumers a chance to view their debt through a different lens. Instead of seeing it as a burden, debtors see their situation as something that’s manageable. This shift in mindset is the first step and from there, you can go forward and fix the situation. Until you look at debt with a bit of optimism, you will continue to struggle with it greatly.
Using their relationships
You might not realize this, but many settlement company employees have developed relationships with your creditors. They get people out of debt for a living, so it makes sense that they would have a rapport with the credit card providers. When you come to the settlement company, they will contact the people that they know at the credit card company. They will has out a solution that works for everyone involved. These people who settle your debts have experience and they are often very sharp. It makes complete sense to use them if you have big time debt needs.
Empowering you
One of the best things that settlement companies do is give their customers some more power. They make sure that people like you are getting the most out of your own ability. Inside of most debtors is the ability to put together a nice debt settlement offer letter, but you might not know how to get started. Likewise, the power to be strong and take a stand against debtors is a step that you can take. The settlement firms just add to your arsenal.
By: Hector Milla
Tags: Anchor, Big Time, Consumers, Credit Card Companies, Credit Card Company, Credit Card Providers, Creditors, Debt Help, Debt Settlement Companies, Debtors, Debts, Finances, Getting Out Of Debt, Mentality, Mindset, Optimism, People, Relationships, Settlement Company, Settlement Programs
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Wednesday, August 25th, 2010
You may have heard from lots of people of how they have managed to work towards coming out of debt using the power of negotiation which put creditors on the back foot. You no doubt are dying to know how they made the initial contact and how they went about it. Your first step towards working off your debts would be to get in touch with a debt relief network, plenty of which are available online. Once you sign up or give them a call, they will be prepared to give you advice, usually free of charge.
They will hear out your debt problems and will then look through a list of debt settlement companies they will have on their roster. These companies usually have a very high success rate in negotiating down debt with creditors and are manned by professionals. They are experts in the field of negotiation and are also largely drawn from the banking and credit industries, meaning they have innumerable contacts ready to listen to them.
Moving closer:-
A reliable debt relief network will only have highly reputable such companies on its rolls, those with a success rate of 90 percent or even better. They should also have an impeccable reputation, a strong network and the ability to listen to the debtor and come up with a tailor-made plan for him or her.
You will not have to locate the companies yourself but the debt relief network will do it for you. They will find you a compatible `partner’ and let you two decide how to go about things. Conducting a search on your own could be a futile and thankless job, not to mention time-consuming. Networks know what they are talking about and have conducted thorough background checks on the companies on its rolls. And after a conversation with one you it should be just a matter of minutes before they come up with a company who would measure up to you standards.
Till date, few complaints have been received from consumers who have gone to a legitimate network for help. Inevitably, they seem to emerge satisfied once negotiations are over indicating the network has done a good job in playing matchmaker. The organizations have benefited a lot of people and are seen as the first stepping-stone to getting out of debt, which in any case is a reason for cheer.
By: Katherine S. Young
Tags: Advice, Background Checks, Compatible Partner, Consumers, Contacts, Creditors, Debt Problems, Debt Relief, Debt Settlement Companies, Debtor, Debts, Impeccable Reputation, Legitimate Network, Matter Of Minutes, Moving, Negotiation, No Doubt, People, Success Rate, Thankless Job
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