REFORMING AN INDUSTRY

After 10/27/10, virtually all of the companies offering to settle debt for a fee, will have to charge those fees based on a contingency. In other words, you pay for the service contingent upon who you hire, having successfully negotiated a reduced pay off amount with your creditors that you then accept and fund. Makes a ton of sense right? Yes indeed!

People will, however, still need to approach the idea of hiring someone to settle debts with caution.

Where We Were

Debt negotiation companies have, for the most part, been able to charge upfront fees. Often, the fees have been spread out over 6 to 18 months or more. This practice has long been recognized by some of us in the industry as one of the leading causes for consumers to “fail and bail” from their settlement program.

• The reason for the fail; money that could have been aggressively saved up to fund the earliest settlement offer went to the service providers fees instead.
• The reason for the bail; creditors and their assignees continue down a relatively predictable path to collect on unpaid accounts which can eventually lead to filing a court action to force you to pay.

Being sued does not necessarily mean the death of your debt settlement plan, but you need resources to address the lawsuit before it becomes a judgment. Without the money needed to address the issue, it will often mean the end of the road. Having paid upfront fees to a company who put their profit ahead of your success means you have limited, or no, resources to maneuver through the different stages of collection.

Where We Are

You may have, or currently do, recognize a debt settlement plan to be a realistic approach for you to avoid bankruptcy. Having enrolled (or thinking of enrolling) in a plan with a company whose fees were/are/still paid prior to successful negotiations is equivalent to gambling. You bet you can get through the settlements before getting sued. The company you hired bets they can get you to pay them all their fees before you bail.

Many companies who sell or perform debt settlement today will find that, without the ability to charge the high upfront fees, they will not be able to keep the marketing machine going. They will leave the industry. In their wake, we will hear from many more consumers who were sold the hope of avoiding bankruptcy by sales people whose only motivation was to meet a quota, keep their telemarketing chair and get paid. For more than a year, the media and internet has been ablaze with stories of people being taken in by the promises of many players in the debt relief industry. They are a statistic of the “fail and bail”. The statistics will get worse as several companies close their doors and leave their customers in a lurch, having paid in advance for a service that now will not be completed. At least, not by the people who were already paid for it.

Where We’re Headed

Do I sound a bit jaded? That’s because I am. So much so, that I can see where we are potentially headed in this industry.

Beginning in September, I think we will start to see some similarities with new and existing companies offering debt settlement  based on the now required (in most cases) contingency fee structure. Two of the similarities will be:

1. The new sales approach; “You need to come up with money as quick as possible to settle with your creditors”. – This is a good thing! It has been missing from the message of the majority of people selling debt settlement for a decade.
2. Many of the companies offering success fee debt settlement will charge between 25%-30% of savings where possible (some states have limits or caps on fees –Illinois is capped at 15%). – This is a bad thing!

When comparing 50% of your account balance as an average settlement, 30% of savings is roughly the same as charging the 15% of debt enrolled that has been the average in the industry to date. Fees could actually be higher than before with debts settled early in the program and for less than 50%.

We will still see high “fail and bail” statistics because companies will settle a debt and collect their contingency fee first, before moving onto the next settlement. There really is no problem with that per say. They did a job and should get paid for it. It is the correct model to have. Always has been. The problem is if the fee is too high, it still takes just as long to settle the debts as it did prior to the FTC banning upfront fees for a settlement service.

Where We End Up

I estimate it will take a year for the industry to settle in to the new business and operational realities created by the new FTC rules. Some companies are going to try to adapt, only to quickly find it no longer worth their while. Some will find that they should have been doing business this way all along, and will thrive. The amount of companies around a year from now will be far fewer than we have today. Within 12 to 18 months, the industry will have completed the all too necessary cleansing of those who came to it in order to make a quick buck.

BOTTOM LINE:

If you are a suitable candidate for debt settlement, which is someone who otherwise would have to file bankruptcy, look for companies with the lowest contingency fees. Even better, look for a company that: Offers low fees and other flexibilities that will lead to your success!

I have continuously written articles and spoken out in interviews about the practice of “selling” debt settlement. Selling someone into debt settlement is the number one reason the industry has been tarred and feathered in the media. The over hyped selling by profiteers and sales groups has resulted in enforcement actions by many states, and new FTC rules, in order to curb abuse.

DEBT SETTLEMENT SHOULD NOT BE SOLD!

Steve Rhode, on his blog, getoutofdebt.org, regularly covers the debt relief industry and its foul ups, bleeps and plunderers. He has recently covered several lawsuits filed by employees against the firms they sell/sold debt settlement for. The lawsuits allege failure to pay wages related to work performed. Steve has posted about lawsuits against: Lloyd Ward and Associates, ABC Debt Relief, The Debt Answer, Debt RX USA, Silverleaf Debt Solutions, CreditAnswers, and Credit Solutions of America. Key assertions in these lawsuits provide a clear view into the sales culture at some of these companies. I will focus on Steve’s post about the employee suit against Credit Solutions. Credit Solutions are also the target of multiple state legal actions.

From Steve’s post where he excerpts from the court record (my comments are in bold):

For at least three years prior to filing of this complaint and continuing (hereinafter “Liability Period”), CSA had a policy and practice of not correctly compensating its debt consultants for work performed for the benefit of CSA over and above forty (40) hours per week, to wit: virtually all debt consultants received a $2,000 forgivable draw their first 90 days of employment and a non forgivable draw of $2,000 per month thereafter. Debt consultants qualified debtors for debt settlement plans of Defendant by verifying the debtor possessed at least $10,000 in debt. Next debt consultants analyzed each creditor comprising the $10,000 is owed at least $600 and there are contracts in place between the creditor and CSA. The debt consultant sets up a CSA account for each creditor. Lastly, the debt consultant verified the debtor’s bank accounts and assisted the debtor in picking a payment plan. Once a plan was chosen the debt consultant, using CSA guidelines, would set up a monthly draft on the debtor’s bank account whereby CSA would obtain its fee and moneys to satisfy the debtor’s creditors. Eighty-five percent (85%) of CSA’s fee is collected from debtors’ accounts within the first 90 days. Debt consultants received a fee from the first monthly draft which was a percentage determined on the total volume of draft’s occurring monthly attributable to that debt consultant.

Here we learn that “debt consultants” are what I would more correctly define as sales people. The way this alleged fact is laid out would actually describe more of an order taker. What do they actually do by way of a consultation? It appears they just hit the immediate qualifiers, and then help you pick a payment option that will work for you. There is an obvious motivation for “picking” a payment that you will agree to. That is how they get paid! They have to do it though (more on this below).

Debt consultants were required to work a minimum of 12 hours per day, but were expected to work as many hours as necessary to reach assigned sales goals. Debt consultants regularly worked 14-16 hours a day and CSA provided debt consultants a room to nap and sleep when necessary to reach company goals.

Imagine the pressure to hit sales goals. In the current job market, these sales people HAD to perform to keep the job. They HAD to hit sales goals even if it meant sleeping at HQ to do it! No pressure, right?

Debt consultants were not provided a rest or lunch break, but instead, CSA served debt consultants “cup of noodles” for lunch so they would not have to leave their desk and could continuing selling the debt settlement services.

This allegation is one of the most descriptive of the debt settlement sales culture I have ever seen. Why not just put a shackle from the desk to the ankle of the sales person? Were there bed pans nearby?

Debt consultants worked six (6) days a week.

Ever see Ben Affleck in the movie “Boiler Room”? “ALWAYS BE CLOSING” – The sale that is.

As stated above, debt consultants do not receive overtime for hours worked over 40 in any week.

And why should they? You think cups of noodles are free?

CSA’s revised compensation/bonus plan containing an overtime component does not correctly calculate debt consultants’ regular rate of pay for purposes of calculating overtime; i.e. commissions paid on top of consultants’ hourly rate are not included in their regular rate of pay. – Source

Other than the outright lies that are told, there is no single more frustrating fact about the selling of a debt settlement service than the pick a payment plan approach. It is sold that way because it has to be. A consumer who is struggling to pay their creditors the required monthly minimum is focused on the dollar amount they cannot come up with. When a debt settlement sales person suggests all you need is to establish a monthly dollar figure that you can do, the hook is set!

Imagine if the sales people at Credit Solutions actually shared the TRUTH of the matter with you. If they told you that in order to be successful with settling your delinquent accounts, you are in a race. You have to come up with the money to fund offers as fast as possible. You would not feel the sigh of relief that is purposefully designed into the sales approach by the majority of people selling debt settlement.  Instead, your heart would palpitate. You would know that debt settlement is a tough choice, not an easy one. You would have a much clearer idea if debt settlement is even right for you. The sales person for CSA would not close as many sales. Do you think they would ever get to go home?

Don’t consult with a sales person offering debt relief!

If you are asked what you can come up with each month to put toward settlement, or someone “helps” you come up with a figure they are confident you will bite on, you are talking to someone offering “pick-a-pay”. Pick-a-Pay is a suitability test that everyone will pass. Using this approach means virtually any one breathing will qualify for debt settlement. That is, and has been, absurd (absurdly profitable that is).

Look to speak with someone who actually works with consumers and their creditors/collectors on a daily basis. If they have any experience and are what I would consider a responsible service provider, they will TELL you the amount of money you will need to come up with, and how quickly, in order to SUCCEED with settlement in your particular situation. Armed with this knowledge, you will then be able to evaluate whether or not filing bankruptcy would be the better choice.

You can speak with just such an expert by scheduling a consultation with a CRN negotiator. All CRN consults are conducted by people who, every day, actually settle debt or provide detailed information to CRN members on how to settle their own. There is no one more prepared to provide you the necessary details about how this approach will apply to your unique set of circumstances.

For more on how debt settlement is inappropriately SOLD, read:

• Dude Meets Debt Wall
• Shocking Eye Witness Debt Settlement Report
• Debt Settlement Marketing: The Gist, The Juice, and the Lies

Debt Settlement is a very real option for consumers who are trying to avoid bankruptcy. Unfortunately, the decision to try it is too often made from an emotional perspective. This has, is, and will forever be; The WRONG perspective to use in your decision making.

Unsure, Scared, Overwhelmed?

Those promoting debt settlement for high paid commissions have been able to capitalize on the emotional appeal of avoiding bankruptcy, even when the math would clearly show settlement to be an unwise choice in your particular circumstance. It will be increasingly difficult for those selling debt relief services to do this after 9/27/10.

Knowing What to Expect

One of the more dynamic requirements found in the recently announced FTC rules that will govern the for profit debt relief industry, is the requirement for Good Faith Estimates. There are several estimates that will be required, such as:

• Total fee for service
• When an offer to creditors will be made
• How much money a consumer must set aside before an offer will be made
• How long it may take to achieve represented savings results and thereby complete your settlement program

These estimates, combined with; savings claims having to be backed up by the ACTUAL experience of the service provider (more on how HUGE this is in future posts), account balance increases, estimate of the service providers fees and a few other whammy’s – make for fantastic features for consumers evaluating a debt settlement service!

These fact-based estimates of total savings, fees and program lengths must be provided along with key disclosures PRIOR to consent to pay. In other words, before you sign up for a service. Now you get to see the numbers! Your decision to attempt settlement should always be factored on a very clear understanding of:

—> How much it will cost and how long it will take <—

When all costs are considered, it may not be worth it. If a program would take too long due to your limited resources, you expose yourself to increased risks of creditors using the courts in order to collect.

CRN, for years now, has broken this down in detail during our initial consult with you prior to even suggesting working with us. We do not take a file if we cannot settle one or more accounts within 180 days of membership, nor do we accept a person into a program unless we can see clearly prior to enrollment that you can complete your work with us in 18 months or less (except in rare circumstances).

The required compliance with these new FTC rules will show consumers considering settlement that the program length of 36 months (even longer) hyped by the industry are so problematic, they should avoid debt settlement all together.

The poor image that debt settlement gets is due to the massive enrollment of people who were not suitable to try it from the outset. Companies and sales people have inappropriately signed up the wrong people in order to make huge commissions.

WARNING:

• Get any company you are thinking of hiring after 9/27/10 to put estimates in writing prior to hiring them. If they are unwilling to do so, I would suggest finding someone who will.
• Companies whose front-end sales people lack sufficient negotiation experience (pretty much all sales people) will likely have to use blanket percentages and timing estimates that may not accurately reflect the reality of your situation. This may cause you to conclude settlement is not a good option.
• Companies whose fees are set too high may cause you to conclude settlement is not a good option. Look for credible companies with low fees.

CRN has no sales staff. All initial consults are performed by our specialists who work with our members and their creditors daily. This means the numbers we share with you are based on real time data – as it pertains to you – at that moment.

CRN has, all things considered, the lowest fees in the industry.

Schedule a consultation online or call 800-939-8357 in order to get the facts, numbers, and accurate estimates and see if settlement can work for you! Have a question? Get answers on line, go to: ASK CRN

Today, the Detroit Free Press ran an article about how consumers have the option to negotiate a reduced balance pay off with creditors (debt settlement). Read the full article here: Debt Settlement in Michigan

I was interviewed by the reporter for the story, as was a CRN member who was quoted in the article. The article gave some good advice, but I would like to expand on it. The article correctly stated many companies “have taken outrageously high upfront fees — as much as 13% to 20% of your debt”. The average fee charged by most settlement companies is 15% of the debt you ask them to settle for you.

The CRN member quoted in the article settled $35,000.00 of debt for $12,000.00 by implementing the tools and following the guidance she received as a CRN member. Had she hired a typical settlement company to settle her debt she would have paid an average of $5,250.00 in upfront fees. However, as the Detroit Free Press article stated, she paid CRN just $1,200.00 to do the same thing. Would it really have been the same thing though? Not hardly!

If you hire the typical settlement company, you’ll find:

• By paying high upfront fees before the company achieves any real substantive results for you, you are prolonging your success, and often dramatically reducing your odds of achieving any success at all.
• The company will probably send notices to your creditors letting them know they are now working with you. This means the creditors will know that you are now paying a settlement company instead of them. Often, the reaction to this information will be to become more aggressive about collecting what you owe them, possibly by referring your account to a law firm in your area earlier than it would otherwise and giving the firm authorization to sue for the money you owe.
• The settlement company will generally not be negotiating with your original creditors because they mostly wait for your accounts to charge off. Charge-off usually happens at about 6 months of nonpayment. Once creditors charge off bad debt, they will typically do one of three things with your account, assign, sue or sell.

Settlements are still available when your account goes someplace other than with your original creditor after charge-off, but depending on who your creditors are, you’ll save the most through debt settlement by negotiating with the original creditor BEFORE the account charges off. In other words, you could find yourself paying more, sometimes much more, when settling with a 3rd party.

The article in the Detroit Free Press seems to suggest that the CRN member was still hoping debt settlement would work for her by saying “She’s crossing her fingers that this arrangement works.” It did work. She enrolled with CRN in September of 2009 and completed her settlements in March 2010. She got out of debt in 6 months rather than the 3 to 5 years it would have taken her to resolve her debts if she had filed for chapter 13 bankruptcy instead or the average of 4 to 5 years if she had enrolled in a debt management plan.

Credit Reporting

Debt settlement is an option for someone who can no longer continue making timely payments on their debts and whose credit score is, therefore, either already suffering, or soon will be.

What happened to the credit score of the CRN member quoted above?

The CRN member gave me permission to share an excerpt from an email exchange I had with her on 3/22/10:
“…Two days ago, I re-ran my credit and 3 of the 4 settlements had already posted. My credit was already 671-677 from each of the three bureaus! I think my credit ranged from 670-710 in the year prior to starting the settlement process so this is amazing.”

The effect of debt settlement on an individual’s credit score will differ based on several factors, so please do not take the experience of this CRN member as an indicator of what will happen to yours.  The points here are: Getting out of debt should be your first priority, and once you do, your credit will bounce back regardless of the option you choose to get out of debt.

The US economic engine is based on roughly 70% consumption. In a tough Michigan economy, this CRN member and her family can return to responsible spending in 6 months rather than 3 to 5 years. Furthermore, not only did she avoid bankruptcy, but also, her creditors got something rather than 90% odds they would have gotten nothing were she to have filed chapter 7 bankruptcy.

If you find yourself running out of money before you run out of month and live in Michigan (or anywhere in the US for that matter), please call CRN a call at 1-800-939-8357 when you are considering debt settlement as one of your 3 legitimate options to deal with debt.

Michael Bovee
CRN President

The gist:

Here is the link of a company that solicited Consumer Recovery Network to buy live transfer leads from them last month (These come in virtually every day):

ineedyourleads.com

Commercials like this are aired on television; the consumer calls the number and is asked perhaps 3-4 qualifying questions and re-routed to a call center or settlement firm with their own internal sales floor. Perhaps the number provided will go direct to a sales floor without a pit stop for a 4 question qualifier.

This type of advertising, at its peak last year (perhaps some will pay this even today) ran anywhere from $75.00 to over $100.00 per live transfer. A good (meaning productive–not necessarily ethical) call center in this industry, paying for, and working these leads, has a cost per acquisition (CPA) of anywhere between $600.00 to $1200.00. They have to run a 20% close ratio or higher, in most cases, to hit their numbers. That means they have to approach what they do as a sales process rather than a consultation process.

The majority of people sold into settlement, in my opinion, don’t belong in it. Either the process was sold as butterflies and rainbows, or the plan, due to high upfront fees, which are often successfully disguised to the average consumer stressed to the gills and looking for relief, provides for high incompletion and program drop rates. The higher the fee, no matter how it is calculated or paid, is one of the bigger stumbling blocks to being successful in working with a settlement company. The fee itself can prevent the consumer’s success. Fees average 15% of the total debt that is submitted for settlement. Why so high? Often enough, the fee amount is related to the juice, but I am getting ahead of myself.

The only ethical way to promote settlement as an option is from a consultation/informative perspective where there is no pressure to hit a quota due to high CPA. If a company does any national advertising or purchases live transfers from a national advertiser whether radio or television, it is nearly 100% assured that they are using a sales approach. They must closely monitor closing ratios of the phone staff, and cut anyone occupying a chair who doesn’t hit the numbers. I have visited a few call centers. The majority of men and women in these call center atmospheres are best defined as telemarketers. There are, I am sure, exceptions. In fact, I have met some. That is not the norm though. These are the same people who will be just as effective at telemarketing residential home siding, as settlement services.

The juice:

Your future… sold to the highest paying servicer! On first contact, if you are not talking to the company that is actually going to handle your file, you are talking to a sales guy. His motivation is selling you into settlement, whether or not it’s a good fit for your situation, in order to get a commission. The criteria for where the sales guy will refer you, in my opinion and industry experience, will not be based on who does the best work, who has the most success with consumers, who will best serve your actual needs for getting out of debt with a settlement process, or who is going to charge the least so that your money actually goes to your creditors. It is absolutely (and unfortunately) predictable that the vast majority of those selling settlement, will gravitate to referring you to where they will get paid the most. You will seldom be referred to a servicer whose fees do not maximize the commission sought by the sales person or the company they work for.

The investment required to run one of these centers requires their owners to search out the companies that pay the highest commission for the referral. I have both seen and heard reference to as much as 70% – 80%, payouts of client fees for referrals. Ridiculous? Absolutely! This model is unsustainable for any long period of time. The marketing firm will just move onto the next back end servicer who provides the highest commission. I have witnessed it. Hess Kennedy gets shut down, the sales center then refers to Allegro. Allegro is now shut down, so they will move onto the next. If you’re reading this and are wondering if you are a victim of the “gist & the juice”, the fact that you’re wondering means you probably are.

The price for all of this is passed onto the consumer. They are the ones paying for it through their wallet/purse, and also in the form of lost time and opportunity for the fact that settlement was never the right option for many of them in the first place. They were sold into it.

The lies:

One of several fabrications, or shall I say “massaged facts” used by the settlement sales person is a manageable monthly payment into your settlement fund, thereby extending program length. This is huge, and is used repeatedly because of its success. For example: You have $30,000 in unsecured credit card debt and are paying interest rates somewhere in the 20% range. Your struggling to meet minimums and are looking for options and respond to an ad to “settle for pennies on dollar” or “Get your piece of the bailout and settle with your creditors”. The sales pitch is to put you into a settlement program where you will not be paying your creditors and saving $416.00 dollars a month for 36 months. This is half your current debt. Well Shazaam! That sounds like the kind of relief you are looking for! Your monthly minimum payments, at the high interest you are stuck at, equaled a thousand plus, and this nice man or woman is saying you can be out of debt for the low-low price of $416.00 a month. This is e-a-s-y to sell. This type of relief being offered is what many of us would focus on, no matter how much more there is to the pitch. It’s human nature. It’s the relief we need, and we found it. Some will outline a 42 month plan, or even longer. E-A-S-Y.

Here is the problem. The longer it takes to settle with your creditors, the higher the risk one or more of your creditors will sue you in court in order to collect the debt. Where is your sales guy when this happens? Did he mention you could be sued? Maybe in passing, and if so, he probably said it is very rare to have that happen. What you were not told is that the longer your program lasts the more risk you face of being sued. That would take away all of the relief you felt from having been paying over $1000 a month, to now saving less than half of that a month for settlement. That little massaging of facts goes a long way for the sales close ratio.

The truth about settlement is; you have to be aggressive. You have to put every available penny aside to settle the debt as fast as possible in order to avoid something as adverse as a lawsuit. The relief you will find by using a settlement approach is not going to come until the debt is gone. Settlement is the “rip the band aid off” approach, rather than picking at the corners.

How big is your risk of being sued along the way? It will be different for everyone. It can depend on how fast you can settle, who your creditors are, who they may assign the debt to, who a creditor sells your debt to, what your credit report looks like, the state you live in, transaction history on the account leading up to default. Is a debt settlement sales person going to go over all of that with you?

Lawsuits filed, in order to collect on unsecured credit card accounts, are generally a pretty low percentage compared to how many accounts default each year. I believe those numbers will start to increase in what’s left of 2009 and into 2010. The two largest card issuers in the U.S. have been huge participants in submitting defaulted accounts for arbitration, an alternative dispute resolution done outside of the courts. The National Arbitration Forum (NAF) and the American Arbitration Association (AAA) have ceased all arbitration activity relating to consumer credit cards this summer. Card issuers will likely increase the accounts they place with collection law firms as a result.

At Consumer Recovery Network, we do NO paid advertising. We do not have sales people. When you consult with CRN, you are talking to a specialist on first contact, someone who works with our members and their creditors every day.

If you have hit the debt wall and want to learn about all of your debt management options, including debt settlement, visit Consumer Recovery Network. While you’re there, learn about becoming a member of Consumer Recovery Network, with no risk to you, and schedule a consult to find out if you should pursue debt negotiation.

By: Michael Bovee
CRN President

Settlement with creditors is a great way to deal with debt when you are unable to maintain consistent payments. It is however, not a cake walk, though many in my industry will sell it as such.

This post was inspired by a consult I did this morning with a gentleman in Pennsylvania looking at settlement as an approach to dealing with his unmanageable debt. He wondered onto our website while searching out his options, after having already consulted with another company in the industry.

His unsecured debt totaled $22,000, spread out over 7 accounts. His minimum payments are just over $900.00 a month. His interest rates on most of the accounts are over 20%. That is what’s killing him. He would be able to meet minimums, but for the higher interest, and likely be very successful using an aggressive debt rollup, or debt snowball strategy, to get out of debt quickly and unscathed. His plight, when outlined to creditors, has thus far resulted in “Dude meets wall”.

The company he consulted with prior to me outlined a 36 month program where he could pay into an account roughly 300.00 for 36 months and poof, his debt is gone. Never mind that $3300 of that money set aside over that time will go to the settlement companies fees, I’ll get to that in a moment. The sales person with whom he consulted is selling rainbows and unicorns for a commission. The 36 month plan for his situation is ridiculous for some of the following reasons.

Two of the accounts we discussed have balances of about $1000.00 and another one for $1500.00. Enrolling these accounts in a plan like this, unless they are the first ones settled (even then not advisable, unless left with no choice) is futile and silly. The math doesn’t work. Optimum balance reduction through settlement only happens when you are delinquent, often very delinquent (5 months or more). When you stop paying, default interest rates of 29-32% will be applied, late payments will be assessed, all of which could result, in some cases, in over limit fees being tacked on. Depending on when settlement is reached the amount of the debt could now be double. Can the debt be settled? Absolutely, but using 50% savings as an example, what did you actually save? Nothing, or close enough to nothing to prove that the math doesn’t work.

What if we take these 3 smaller accounts out of the equation? We are now working on $18,000. By aggressively saving and setting aside every penny, this family could be out of debt in less than 12 months and limit to near nonexistent, the risk of being sued on unpaid debt.

Now, I was completely upfront with this consumer about the way I saw his situation and perhaps he appreciates the candor and becomes a member. Perhaps the other consult he had sounded more appealing, with its 36 months, low (too low) payment to his savings for settlement and easier sounding approach. He will pay the typical fee in this industry, which by their very nature is harmful to the settlement process. The sales person will make his commission (some cases I have seen, commissions are in excess of 70% of client fee) for selling rainbows and unicorns.

He may ultimately be out of debt in 36 months, but it will have been a very long 36 months, and he will have paid too much, experienced too much grief, may be sued on one or more accounts and may miss out on strategies that could have been beneficial to recover his credit standing much faster (this is whole different topic for another post).

Moral to this post: Don’t buy into rainbows and unicorns unless you are into paying a salesman’s bills when you can’t afford your own. The settlement industries frontline is, for the most part, populated by sales people motivated by commissions. Rarely do you find a place where you can consult with, and talk to an experienced debt specialist on first contact, prior to forking over any fees and whose motivation is your success, not your money.

If you have hit the debt wall and want to learn about all of your debt management options, including debt settlement, visit Consumer Recovery Network. While you’re there, learn about becoming a member of Consumer Recovery Network (CRN), with no risk to you, and find out if you should pursue debt negotiation.

By: Michael Bovee
CRN President

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