About Debt Settlement

When it comes to debt settlement, most programs follow a similar structure. This can make it difficult to know which one is right for you. This is why we encourage all of our clients to do the proper research beforehand when it comes to the company and the type of program that you are being offered. Sometimes, debt settlement is not the best option for you and if it’s not, then we will be sure to recommend the next best alternative.


Step One

A consumer applies for a debt settlement program

A consumer contacts a debt settlement company and speaks with an experienced debt settlement consultant. The typical client owes more than $25,000 in unsecured debt and is already behind on at least one, and, in many cases, most of the seven or more accounts they hold. Debt settlement consumers are suffering a severe financial hardship, such as a household loss of income, a medical event or a life event like a divorce. Under FTC rules, the consumer pays nothing to enroll in a debt settlement program.


Step Two

The consumer is accepted into a debt settlement program

Following an underwriting process, the company creates a personalized plan for the consumer based on their unique financial position. The consumer creates a separate bank account dedicated to addressing their debts; this bank account is, at all times, under the complete control of the consumer: debt settlement companies never touch consumer funds.


Step Three

A debt settlement company negotiates from the creditors

Once the consumer has set aside sufficient funds in their dedicated account, debt settlement specialists negotiate settlement offers with each of the client’s creditors.


Step Four

The consumer considers a creditor's offer

When the debt settlement company obtains a settlement offer from a consumer’s creditor, the consumer chooses whether or not to accept it. Consumers are under no obligation to accept any settlement, and, under FTC rules, can reject it without being charged anything. The average consumer’s first account is settled four to six months after enrollment.


Step Five

The consumer's debt decreases

If the consumer accepts a settlement, payment to that creditor will be made from the consumer’s dedicated account. Only when the consumer has made at least one payment in furtherance of a settlement offer will the consumer be charged a fee, and that fee may only be assessed for the one debt for which a settlement has been agreed.


Step Six

Repeat the process with the consumer's other creditors

The process restarts for each of the consumer’s creditors until each account is settled. No fees are charged until each settlement is agreed to by the customer. Consumers can withdraw from the debt settlement process at any time, for any reason, without penalty – they are totally in control throughout the entire process.

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