In: Categories » Legal and finance » Debt and credit » Expectations for the Debt Settlement Industry
| If you are considering joining a debt settlement program, make sure that you use common sense and have realistic expectations of what the program will offer. This article explains some common misconceptions about the debt settlement industry. Realistic Expectations for the Debt Settlement Industry Let’s face it, the debt settlement industry has a really bad reputation, but I don’t think that everything can be blamed specifically on the settlement companies. I will admit that there are some companies that do in fact take advantage of clients. However, there are a number of credible companies that do show good results. In fact, I have noticed that a majority of clients’ complaints actually stem from their own unrealistic expectations for debt settlement. Here are a few examples of common misconceptions that might help you have a more sensible grasp on the capabilities and limits of the debt settlement industry. The biggest problem I see in the industry for clients is that as a result of their desperation, they are often times extremely gullible and don’t use simple common sense when choosing a debt settlement company. Clients want to believe that they will only have to pay pennies on the dollar of their debt and that credit companies will never opt to sue them….WRONG. At this moment, a quality debt settlement company can normally negotiate a debt between 40-60%. Can you pay more…Yes. Can you pay less…Yes. No company is ever going to brag about the client who could not save money, was sued, and as a result had to come up with 80% of the debt. Instead, they are going to boast about the client who only had to pay 20% of his or her debt. Both examples are true, but they are nevertheless extremes. The most logical estimate that you can count on for a settlement is between 40-60% of your debt. Anyone who tells you that they can guarantee anything is lying. Hang up and don’t talk to that company again! Secondly, you CAN be sued if you are in a debt settlement program. Anyone who says that you can’t is lying. Hang up and don’t talk to that company again. While it does take quite some time for legal procedure to begin and it is true that companies would prefer not to have to resort to legal matters, they nevertheless will sue you. Remember, you owe them money, and they want it. Fortunately you do have time before any legal matters are going to take place. How much time? That it impossible to tell. It may be a year, it may be 4, 5, or never. Luckily, most clients whose accounts go to legal offices are able to avoid any legal action as long as they follow the rules of a good settlement program. The point is that a debt settlement program does not make you immune to normal collection processes. I think that it is important to remember that those who need debt settlement services are often very desperate, and they need to take a step back to think logically about their decision. Like good Americans, they are looking for an easy, quick-fix solution to their financial dilemma. While debt settlement is a beneficial service that can indeed save consumers thousands of dollars in unsecured debts as well as relieving financial strain, it is in no way perfect, easy, stress-less process. Consumers perceive the debt settlement industry as the miracle solution to their problems, and, well, let’s face it, its not. The inherent problem with these false hopes is that when clients come to grips with the reality, they often become frustrated and blame the industry. Just like in any service, settlement companies have their limitations. In conclusion, if debt settlement is the right choice for you, make sure that you examine your options and that you have realistic expectations. This will make the process much easier and less stressful, and ultimately lead to better results for you. Scott Wallitsch is a consultant for DebtorSolution. To find out more, feel free to visit us at www.debtorsolution.com or email us at info@debtorsolution.com
|
legal disclaimer
1) Our website is not responsible for the information contained by this article as well for any and all copyright infringements by authors and writers. E-articles is a free information resource. If you suspect this article for any copyright infringements, please read the Terms of service and contact us to investigate the problem.
2) The E-articles directory team is not responsible for inaccuracies, falsehoods, or any other types of misinformation this tutorial may contain and will not be liable for any loss or damage suffered by a user through the user's reliance on the information gained here. Please read the Terms of service
Useful tools and features
If you like this article (tutorial), please link to it from your web page using the information above. Linking to this page, this is the only way to help us improve our service, the same time providing your visitors with a way to improve their online experience.
related articles
What does it mean a debt consolidation service? Debt consolidation services represent firms specialized to help people to free themselves from the burden of debt. A debt consolidation service is just what we need to get out of the tangle of debt. If we have debt that seems to grow up more and more month by month, bills we cannot even afford the min. payments, the situation continued for a long time and no end to foresee, then a debt consolidation advice is the solution. How could debt consolidation services prov...
2. Credit cards ~ Advantages and disadvantages
Nowadays, credit cards represent a major element of American life. The most interesting about the credit cards is that they begin to be used in the late adolescence, when children are developing their abilities. Generally speaking, credit cards have pros and cons related to the children’s delayed gratification. These advantages and disadvantages should be taken care of before applying for credit cards. The understanding of the delayed gratification Usually, parents try to socialize their children in ...
3. What you should know about your credit record
If you’ve fallen behind in your payments, that information is probably being reported in your credit record. What is a credit record? And why should you care? Whenever you apply for a loan or a charge card, and many times when you apply for an apartment or a job, someone will check your credit record to see if you have a history of paying your bills on time. Your credit record shows all of the loans and credit accounts you’ve had for the past seven years, and records every late payment....
4. Factors for calculating your Credit Score
Payment History (on an average 35% of your score is based on this history). When you apply for a loan the first thing that a lender usually examines is whether you have any unpaid credit accounts in the past. This is because any history of late payments may decrease your score although this happens in rare occasions. A late payment occurring once or twice is outweighed by an overall good credit picture. Again if you do not have any history of a late payment that does not mean that your credit score will improve. This is...
5. Nonfinancial Factors That Affect the Credit Decision
As virtually every credit professional knows, making a credit decision is as much an art as it is a science. The stark financial analysis may indicate that the customer should not be granted credit terms, but there are often other factors to be considered. Here is a brief look at some of the nonfinancial issues that affect the final determination: • The 5 Cs of credit: character, capacity, capital, conditions, and collateral. One credit analyst revealed that his company routinely sold on open-accou...
6. The four steps to reduce your debt
There are 4 basic steps that will help you get out of debt. 1. Admit that you have a problem and commit yourself to fixing it. Only you can solve your debt problem. And you can only solve it if you decide that it’s a problem worth solving. There are a few ways of making that commitment. Some experts recommend writing a statement owning up to the problem and signing it. Others suggest that you call a family meeting and have an open discussion of the debts you face. A debt problem is ...
7. Types of Long Term Debt
The following types of long-term debt are covered here: 1. Term loans 2. Bonds 3. Debentures 4. Mortgage bonds 5. Convertible bonds 6. Senior debt 7. Subordinated debt 8. Junk bonds Term Loans. This is the form of long-term debt most frequently used by businesses. It is a loan from a bank to acompany that is used to finance expansion efforts. It has afixed maturity date, frequently five to seven years from the date o...
8. Tips to improve your Credit Score
Below are described general tips on how to improve your credit score. 1. Always try to maintain a good track record of paying your bills on time. This will help you to enhance the credit score. 2. Be aware of the fact that when you miss a payment on any collection accounts and try to close the account the report of the account will always be there on your credit report. So try to avoid that. 3. Visiting a credit counselor will not affect your credit score or make you lose some points. Ins...