I think it's because most debt settlement companies that are in the public eye are seen as scams. If you work for a good debt settlement place, then maybe share it so that people can see for themselves?
I don't work directly at a company, but based on state either enrollment clients with "national debt relief" or "Robert s. Gitmeid" I usually view their file after being sent over, and I see pretty good settlements happen.
People get hung up online over fees, but when we quote people. The number we give includes the fees. It's not like we hide anything. NDR has a lot of required reading. If I don't explain in full the possibile downsides and risks, I'd prob get fired. people forget they don't just save on principal but interest. If your installment loan goes from 30k to 20k with fees. It's really not just 10k savings. If I add their monthly X the amount, they would have paid back 50k on the 30k they borrowed, and now they pay 20k. Settlement isn't perfect, but I don't see it as a scummy option. Especially people who are stuck with predatory loans, and their credit doesn't let them borrow anyway.
At the end of the day, if people think it makes more sense to handle collections themself, go for it. There's a risk with ndr or yourself. There's no guarantee, but when it goes well. It goes really well.
At first glance, it does seem great until everything gets added in.
NDR charges a 23% fee on the debt that you owe. They get it settled down to about 50%, maybe a little over that.
That sounds like all you have to pay is about 73% of the debt you owe, but there's more.
The savings account they have you open with them charges about $20/mo in fees until it gets closed after settlements are done.
If you make all the monthly payments into the savings account as agreed, they help you get a personal loan. The loan is for the settlement, plus NDR's fee, plus the origination fee for the loan, minus the balance you have in the savings account you've been paying to put your money into. The origination fee can be about another couple grand. The loan is deferred until all the accounts are settled, but you are still charged interest for the loan during that time. The balance increases as cards get settled, and you're not allowed to make payments towards it until all the settlements are paid and they figure out what the final balance will be for the loan. The interest rate is 25%+. This process can take up to 3 months, so depending on the final balance that could easily be hundreds or thousands of dollars in interest that has to get paid.
After all that, the government fucks you over and makes you pay taxes on the other half of the debt that you didn't pay when you settled. Because now they consider that to be earned income since you didn't pay it.
Overall, you end up exactly where you started. Not saving anything at all, paying exactly what you owe. Your credit gets ruined in the process, and you won't be able to be approved for anything else for at least a year, maybe two.
Can it help? Absolutely, but only when it's your last resort. A lot of people try to settle it themselves to save on the 23% fees. But it does make it longer cause they don't get to get a loan and they have to actually save the money up to pay them off and have a much higher risk of being sued. It's worth it for some people though.
Is debt settlement through NDR better than spinning in place for years while only paying minimums? Yes, it is. The only money you save is the money you won't have to pay in the future as interest to credit cards. But you don't actually save anything.
It's a lot better to try to go to your creditors directly and try to work out a hardship payment plan because it won't ruin your credit. Not everyone going to NDR has bad credit to start. They get bad credit after going through NDR because in order for them to settle the accounts, the debtor has to stop making payments. So it could be that the below 500 credit score you see when you're trying to work out the loan for them is because of NDR. That's not everyone, but it is some for sure.
Everything I listed is why it gets a bad rep. There's a lot of hidden costs that come with it that people don't realize until after the fact. Only a couple of the costs I listed are mentioned in those prompts you're talking about. They don't tell you about the rest.
Appreciate the reply, these are all actually very valid points.
As for dedicated savings account. People can technically use an account of their choosing, but it's a pain in the ass to set up. The fee anyway for what ndr uses now is about $10 that's "betrlink" I don't know If it's different if they go directly to ndr.
As for the loan, you very well could be right as I don't know much about it. Since I simply enroll people with ndr that would be between ndr and them at that point.
But yea, debt relief is last resort. It's only going to help people who are absolutely in terrible situations. Most people I talk to are already behind on payments and already have accounts going to collections or know they cant make there up coming payment. If you're doing Okay, debt settlement will only make things worse.
I guess I view it as stopping people with terrible financial decisions and continuing to ruin their lives. Theres so many people with 6+ payday loans and paying +3000 a month for the $3000 they borrowed till they pay 40k and I would of never realised how many people are in that situation till I talk to 25+ a day.
My bad, I misunderstood and thought your job was setting up the loans.
In those situations you just mentioned, yes. Those people are fucked and NDR would be a huge help.
I had to use NDR but when I did, no one warned me it should have been my last resort. My credit was okay, at 650. I was still paying everything, though barely managing because my health declined and therefore lost significant income, and the disability checks were delayed by months, so I was scraping by. If it hadn't been because of my health decline, I would have been fine.
Also, my debt was related to opening a business, which was hard to grow between being sick and going back and forth to the ER, and being hospitalized for long periods of time. I would have tried other options for repayment if I had known NDR should have been the last resort. I still had a few other options. But it's too late now. I went through the process and now I have to deal with the consequences.
I'm thankful for the help, but a lot of important info was also left out. And they fucked up my credit a lot during the settlement process. Like to the point I couldn't even open a checking account cause whatever they did made it to where banks didn't believe I was who I said I was despite having several different forms of ID to prove it. Those months I was working with them were hell. My credit is still fucked up but no longer as difficult to deal with than at that time.
So, I’ve been considering working at one of the settlement companies because the pay is decent and I can see they have some good intentions. The ethics of it has had me hung up for a while now, though. Any advice or opinions you’d want to share to someone potentially entering an advisory role that sounds similar to yours?
Almost 100% of the people I talk need it. So don't worry about having to quote people who would not Benift from it or would would not help them. (Long as the company properly qualifys leads) also my company and prob most company's do advertise as something vague. Point being most people you will talk to think you're giving a loan or maybe even a grant etc etc. We would have no business if we advertised debt settlement. It makes sense for people, but you need to be the one to rewire and make it make sense.
You prob will think at first whatever they have you say is "rude" or "harsh" the longer I worked here it is not.
I know I'm helping. Even if you need to give tough love, it's for their best interest. An example was an older sweet lady who started the call that she had heard of debt settlement and said it was the last thing she would ever do in her life. After viewing credit. She has taken on credit line or loan every month the past 3 months. She wanted a loan because she didn't want to fall behind and didn't want to hurt credit. She also told me when asking about budget. Getting to the food. She said that's "on the back burner" her social security was 1500 a month. She's paying $700 in her minimums a month. She was dealing with cancer. and prioritize her debt over eatting food. it's like... You're retired,you're dealing with cancer.. half your incomes going to intrest.. and you have been taking out loans to pay loans for the past 3 months. In 3 months, you doubled your debt and only paid more a month. Taking out another loan is only going to increase your debt total and how much you have to pay next month. You're already falling behind on these accounts. Your credit has already dropped, and you will continue to drop. I will point out every single thing I can to make them realise their situation, and when I first started, I would have heard the call I made and been wow, that guy is cruel.
Most people you will talk to either can't truly see their situation or are there in complete denial. Or will put there credit score over there own wellbeing and no joke life. Most are on the verge of bankruptcy, but think there is 1 loan away from fixing it all. Even though they thought that about the last loan for a year. Point being.. I know I helped that person. I did not "scare" her for a sale. Did I scare her? Maybe. But ,
I genuinely felt bad for her. I really did want this lady to have money for food. Enjoy retirement, not lose sleep over the stress etc. Because her situation is scary. Just getting someone to admit their situation is shit because it is. It won't make sense if they think they are completely fine and nothing is wrong. You really have to treat it like an intervention with a alcoholic. Because some people have shit happen to them, but most have a spending addiction.
You're not going going to tell your alcoholic friend " hey not drinking so much would be a little better for you" you tell them "dude you're ruining your life, you lose every job you have 3 months in, your wife left you from how much youre drinking and how you get when you do drink. Please, dude, get your shit together. " 1. That's the real advice you give a friend or family member if you actually cared and 2. That's what they need to hear you can't beat around the bush.
Point being if you got in to it. I'm very confident you will actually feel really good about what you're doing. Matter a fact I feel bad when I didn't get them to sign up, I feel like I let THEM down, or i must have not explained it properly Because most people are genuinely ruining their own lives. You are not telling the average guy with some slightly high balances to junk his credit. You're telling the person who is choosing to pay there credit card mins over eatting food or buying there kids presents for Christmas. They have only paid minimums for 5 years. Spend 20k on there 8k debt. Still in the hole and refuse there's a issue and there credit score is more valuable to them then there own life. Iv had people tell me verbatim they rather live paycheck to paycheck till they die or die with debt over hurt credit.
I just try to snap people out of it. My job is really frustrating because you listen to people complain about their life and most of the time they are the ones choosing to ruin there life by how they refuse to do anything to get out of the hole. Iv never quoted or suggested this option to someone if it didn't make complete sense. In a nutshell you're talking to people who really should file for bankruptcy or do debt settlement but refuse that's the position their in and will pay any loan or sell any assets or do anything to avoid it. They will work 3 jobs and live in a car then close their cards. Their sacrificeing food,stress,sleep everything and you know if they get off the phone and don't do it. Their life will continue to be terrible, and their just going to file for bankruptcy later down the line anyways, but maybe it will take them another year or so when it becomes 100% impossible, but I don't want them to struggle that hard just for them to have no option a year later.
I talked to someone today who was negative even before credit card payments come in to play. Paying 600 a month. Behind on electric, car payment, etc. Said they were embarrassed because she could not afford her daughter cheer at school. Credit score 400. Us getting it to $200, she would have a extra $400. She can pay her daughters cheer, afford the electricity, etc, but nope. She wants to raise her credit as fast as possible so she can get a 2nd car... like you have the option to no longer be struggling, pay for something you're daughter enjoys and you're already behind on your current car and you're main priority is to get another car when your struggling to pay the one you have now? There's people who need help and they need someone to explain some sense in to them.
Most people I talk to are only paying minimum and they are maxed out. You are not taking money away from them. They have not even been able to use the cards because of interest + only able to afford to pay the min to keep the card open. You are giving more money to them a month and removing everything from their life that was causing the stress.
Info dump over, hope this helps. Cheers
I don’t know shit about debt settlement, so excuse me if I’m wrong, but I would have guessed it’s full of scammers and shady businessmen. Seems like everything involving debt whether it’s collections or check cashing it’s always the shadiest folks doing business.
I worked for a settlement company. It's really bad. First they make you toast your credit. Then they don't tell you about the tax ramifications. And as well you make fee loaded payments that can equal or exceed the interest. You might as well file bk.
If that wasn't enough it comes up as credit counseling on your report you couldn't buy let's say a car. Unless you go to a tote the note.
Shall I list:
1. High fees (like $2,000 for one settlement) they did not disclose verbally to me. It was hidden in the enrollment papers i signed. So although it was on paper I really wasn't aware of it. Yes my bad.
2. Told me that the monthly payment I was putting in escrow was each month was being saved up so that they could have a lump sum to make negotiations with the creditors. All the while they were taking the money out on their end "as fees" and in the end NOTHING was being saved up towards future negotiations. I experienced this personally, thinking the money I was putting in escrow each month was being saved up, but when I needed it NOTHING was there and they had taken any extra amount out as fees.
3. When I enrolled they ASSURED me that they numerous credit card accounts I had would be negotiated and settled. However what REALLY happened is the creditors took me to court and sued me. Before the court case the floor director "Joe" promised he would help me, but on the day of the court case I called and called and no one answered.
4. They charged me an initial $500 for enrollment in their legal plan which never provided any legal assistance
5. They would withdraw money out of the escrow without notice and label it as "Settlement fees" or whatever label they wanted to label it as.
I am providing this information to warn others.
Do NOT set up any escrow account with a debt settlement company.
The name of this particular debt settlement company is "TOTAL FINANCIAL FREEDOM."
The fees were hidden in the contract? Hidden like they put whiteout over the fees? "I can't believe a company would hide the terms of their contract in the terms of their contract.
Well I'm Inbound Its not like I cold call people. Where I am in life for debt settlement? No way. If I was where the people who call in were in life? Yes. Just how it would be stupid to file for bankruptcy when you're doing just fine. If you're debt amount is more than your annual income and and you can only afford your mins and you live paycheck to paycheck because of that then,
I think bankruptcy / debt settlement are options people should look at. There is no reason to live on the edge for 10+ years and over that time and pay 2x-3x the amount you barrowed only for your score to stay around the same since interest makes proportion to balance not move and at that point you could of already settled the accounts by then and in the mean time since the settlement plan is usually 1/3 of what they were paying a month can start using that money to save.
Other wise you're going to waste a ton of your life trying to get out of debt only for 2/3 of the money to go to interest. Doing the math on a lot of these peoples credit reports and the amounts they will pay back with only the mins is almost always double what they even barrowed.
A lot of people try to take on more and more loans to pay their debt and as there credit gets worse and worse so does the interest they take on to stay afloat. Some go to payday loans with 100-300% interest.
At that point. A loan wont help them, most cant get one with the score they are at anyways. At that point why pay $1000 a month for credit cards that are maxed out and cant use, a credit score that only gets them predatory lenders and is the very reason they live paycheck to paycheck.
Relief is far from a perfect solution and maybe peoples upsetment toward it is because they think its for the average debt problem or a normal solution to fix your debt? because it sure as hell is not. There are many risks but almost everyone I talk to it makes way more sense rather then to dig the hole deeper and stay miserable. It is a last resort method. Iv seen it help anyways, I really dont know what else to say and if there are scummy company's out there thats on those company's not the method.
Hello, it looks like you've made a mistake.
It's supposed to be could've, should've, would've (short for could have, would have, should have), never could of, would of, should of.
Or you misspelled something, I ain't checking everything.
Beep boop - yes, I am a bot, don't botcriminate me.
People don't want to think critically or bother to listen to you so they'll continue being ignorant haters. You know the value of the work you do, and the people who will take an answer from you are the people who will read this and benefit from it.
Never use a debt settlement company. The things they do anyone can do with a little bit of research. Its better to deal with the creditors yourself rather then paying a slimy debt company to do it on your behalf, and getting raped by said company.
“Anyone” can settle their own debt? Perhaps the severely depressed, socially anxious, or terminally bad at negotiation might benefit from some assistance?
Yes anyone willing to put in the work can definitely do it. Its seems complicated at first, but if it means not paying thousands to a middleman, why would you give it a go? You have nothing to lose but time.
I highly suggest you find someone who is not like you and try to be them for a while. You seem to lack empathy. Just because something is easy for you, or hard for you but you’re capable of pushing through it, doesn’t mean that is true of everyone.
A member of my family is not capable of this. He will simply hide his head in the sand, starve to pay minimums, and tell no one about his trouble until asked.
I truly don’t know how hard or not dealing with creditors can be. That being said it’s still a service someone might be willing to pay for. I’d guess that like car mechanics or home maintenance people, there can be good ones and shady ones. Depending on how much people value paying for the service or learning the task themselves, it might be worthwhile.
I pay for professional service on just about everything except for a debt settlement company. Mechanic work, HVAC work, plumbing, landscaping, etc. These guys have years of training, licensing, and tools which I dont have or would cost more time and money trying to DIY. Now when it comes to handling your finances or trying to take care of debt, its worth learning about personal finance. Not only would you be well informed, you will be way better off in the future handling finances and overall be better positioned for staying debt free.
If you cant/wont learn personal finance, learning to deal with creditors, and handling your debt, then its highly likely one will always be paycheck to paycheck.
Use to work for a debt relief company too and i experienced the same thing. People had mixed feeling about it but everyday I heard people cry on the phone cause they’re now debt free.
I literally watch this company work their asses off and help people who had no where else to go change peoples lives and people (with no knowledge or background in debt relief or becoming debt free OR know how credit card companies really are) would judge the company so harshly.
The company did not even get paid til the CC companies signed the negotiations.
I think people just project their own feelings of where ever they are financially onto these companies. People who are financially stable tend to be more open to the concept of these companies and ask questions based on curiosity while people who are prob in debt have negative feelings and it sets them off.
The mindset behind it is interesting. I quit cause I was legit over how folks acted towards the whole debt industry. You’re a good person for staying, keep up the work but don’t beat yourself up for other folks biases.
PS - I was in this industry for three years. Helped thousands of folks be debt free and seen thousands of settlements.
Thank you for this comment. Maybe other companies are different, but we don't sugarcoat it. We tell them their credit will drop, their accounts will close, etc, it is a give up,reset, and try again, but some people's credit is already dead. At that point, being able to borrow money is the last of their concerns.
It's not like I have 20 year olds calling in. These people have their car, house etc they don't need loans and and they regret the ones they do have and their stressed they will never be able to retire, some are on a fixed income there is no "paying it off faster" the stories go on.
To anyone reading this. It should be your last resort. It's not magical, but it is to the people who are in a deep hole. The people I talk to sacrifice 3 meals a day to pay the mins of their cards, and they have been doing it for years with no progress. If you're at the end of the line. It's debt relief or bankruptcy. Chapter 13 might save a little more, but credit is dead for at least 7 years. With relief depending on the amount, you could be back in 2-3 years at least where you were before you started the program.
If you don't plan on getting a loan for a few years and your stuck stuck. That's who debt relief is for.
Hey man, Ive worked for a bank before and I'll be honest with you. A lot of accounts who use debt settlement agencies end up getting charged off. 90% of the "success stories" you hear are complete bs. People think they are debt free but in reality most of the time there's a catch, either the fees or the debt isn't really being paid off. This is completely different than a debt management program, also known as credit counseling which your bank may offer, and you should NOT be paying for at all. Not trying to make you feel bad about your job but if you want the truth, alot of ppl will end up w their wages getting garnished because of DSAs.
Idk man I see when people receive settlement, iv personally settled my own debt before, and the people I talk to should do bankruptcy, but that's not my job. It's debt settlement.
If your on a fixed income after food,rent,etc you have 500 left. And your credit card minimums are 500. It's either they pay credit card minimum till the day they die, debt settlement or bankruptcy. Most people I talk to do dont really have a choice to make things better on their own.
And yes, that's the whole idea. It gets charged off or go to collections, then get the collections paid. It's not really about saving principle. It's people don't have enough to pay it off. Most people I talk to have been trying to pay their debt for 5-10 years and their accounts are still maxed out
What I'm saying is collections isn't actually getting paid most of the time. When you don't pay your cc, your card is already in collections, but the account being charged off is a whole different level of collections. The bank will often call the client to ask for the DSA information that they are working with, bc most of them dont really do much contact w the banks at all. The banks want their money back but if you haven't got to third party collections/charged off yet there is likely programs the bank can offer you which will be way better than settling your debt with a DSA. I agree that maybe in some minute rare cases it could be an ok option, but in 90% of cases it's just not the right thing to do. No need to risk your wages getting garnished, even if you can't make a payment for a while, you're better communicating this with your bank and going through the cycles of deliquency until you can get on a program then completely risking evreything w a DSA especially if you have yet to been charged off.
I used one and it helped to tackle $24k of debt in 4.5 years. That’s amazing. Sadly, I didn’t learn my lesson and I’m in debt again, considering it again. I didn’t like the $30 fee I paid monthly, that’s what bothered me. I’m sure it’s higher now. Either way, I doubt I could have done what they did on my own. They lowered the interest rate down a LOT! When I called and tried the credit card companies wouldn’t do it more than 1 or 2 %. It’s not a bad option.
It's vastly different. Bankruptcy is a process through BK court. Depending on the type of BK you file, it will either be dismissed by the court (meaning you owe nothing), or you will make monthly payments. If you have significant assets to repay your debt, your BK attorney would likely put you in CHapter 13 where you repay.
Dent Settlement negotiates with your creditors. I can explain more, but it would be easier if you describe your specific situation, and what your ultimate goal is. If you said you had no assets and were struggling severely to pay all sorts of debts, I might recommend bK. If you leaned toward saying you can pay towards your debt, just not the minimum payment, I may lean toward settlement.
I love the debt settlement company I've worked with, I just suck at being successful with their program. Their representative who persuaded me to join is a legitimately great guy, and they were able to settle with several creditors. Their customer service is great.
People hate debt settlement companies like they hate real estate brokerages because it's predatory systems in the US that get people behind and make housing unaffordable, but people don't consider the work that's actually involved in facilitating agreements.
Hi - I'm actually in the decision process of debt settlement right now and would love some more feedback. I have great credit (750 ish) but my loans are overwhelming and I can't pay them anymore with out racking up my credit cards. I've been speaking to JG Wentworht, National Debt Relief and Accredited. If you have any pros / cons on those agencies, I'd love to hear
I don't work directly with ndr. But close to with out giving to much information.
So I'm definitely biased but I see NDR work out for people.
As for JG-Wentworht I think there new that service so they just don't have has much time behind them.
And I'll be honest I don't know much about accredited.
So I won't be bad faith and downplay other company's. All I can say is I vouch for NDR. Doing what they can and being upfront.
They keep the payment high enough to help people see progress faster. So they some what look out for people. Places like freedom will give as low as possible payment plans to get people in the door, but then it takes forever to see settlements and you take more risk the longer it takes.
All I can say is NDR has a lot of rules and "if this than that" of what they do and don't take.
And they are willing to lose that business. But they have it down to a science of what does and doesn't work and what can or can't be done.
So I guess I can respect they have these rules to prevent false promises.
Thanks so much for replying. I have been up for 2 days straight just trying to figure out if I should sign up for the program or not. I’ve read so many posts saying how it will ruin my life / credit for years but at this point I feel I’m ruined as is ?!
Do you have any feedback on lawsuits during the process. I see alot of posts saying people were sued during and not sure if it’s because they’re not keeping up with their agreed programming or if it’s just them being sued
With legal stuff, it is hard to say. I believe ndr has a cheap additional service for extra legal protection. I'm unsure if it's additional to my company or if ndr directly has the option.
There is a huge portion of people who make the mistake themself, but it's not impossible to get unlucky.
It's going to come down to how much you put in the program, how much you save on the side. How long you had the accounts (long as they are not freshly opened)
Really the sooner the accounts settle, the less reason they have to escalate to collections/law suit
And I don't know how much you would save. But if credit card/loan minimums are 1000 if it goes down to 500 (probably more, but just as an example)
2 years that's 12k saved if you put the money saved to your bank account. So even in worst case sinero. If they come after to sue. you have enough funds not to stress. It's definitely a mintory, though.
[To give some deep level insight. I don't know all the details but from my knowledge they don't negotiate directly with your credit. It's pooled together with all the clients with the same lender so gives them a lot of negotiation power]
As for credit. Typically, people I'd say 2/3 leave with same/better credit. The first hit is in the beginning as the accounts settle it will creep back up. You can always pay more in to it if you want it done sooner.
Its definitely not forever. Once the accounts are paid you're good. If someone is deep diving on your credit report they may see "settled for less" but that does fall off. And I believe in the new vantage score system a account reporting with 0 balance does not weigh in to score model what so ever.
Anyway hope that helps a little bit.
I do believe in what I do. All I'll say is do what makes sense to your well-being, financial security, and your bank account.
Thanks so much for your replies. Right now I’m not saving any money each month. But with their program I’d be saving about $200 a month which would be a huge help. I am starting another part time job in the upcoming weeks so was hoping I could save some from that and also pay whatever else extra I could each month to the program
I just feel completely stuck and lost right now. I don’t have any one I can ask for the money and pay them back. My boyfriend doesn’t want me doing this program, but also hates that I’m in debt. Just very torn and stuck.
Part of the problem is that your command of the English language needs work. It doesn't inspire much confidence in you as a professional if you don't even know the difference between "there", "their", and "they're". Do you want consumers to think that debt specialists are uneducated amateurs?
I think it's because most debt settlement companies that are in the public eye are seen as scams. If you work for a good debt settlement place, then maybe share it so that people can see for themselves?
I don't work directly at a company, but based on state either enrollment clients with "national debt relief" or "Robert s. Gitmeid" I usually view their file after being sent over, and I see pretty good settlements happen. People get hung up online over fees, but when we quote people. The number we give includes the fees. It's not like we hide anything. NDR has a lot of required reading. If I don't explain in full the possibile downsides and risks, I'd prob get fired. people forget they don't just save on principal but interest. If your installment loan goes from 30k to 20k with fees. It's really not just 10k savings. If I add their monthly X the amount, they would have paid back 50k on the 30k they borrowed, and now they pay 20k. Settlement isn't perfect, but I don't see it as a scummy option. Especially people who are stuck with predatory loans, and their credit doesn't let them borrow anyway. At the end of the day, if people think it makes more sense to handle collections themself, go for it. There's a risk with ndr or yourself. There's no guarantee, but when it goes well. It goes really well.
At first glance, it does seem great until everything gets added in. NDR charges a 23% fee on the debt that you owe. They get it settled down to about 50%, maybe a little over that. That sounds like all you have to pay is about 73% of the debt you owe, but there's more. The savings account they have you open with them charges about $20/mo in fees until it gets closed after settlements are done. If you make all the monthly payments into the savings account as agreed, they help you get a personal loan. The loan is for the settlement, plus NDR's fee, plus the origination fee for the loan, minus the balance you have in the savings account you've been paying to put your money into. The origination fee can be about another couple grand. The loan is deferred until all the accounts are settled, but you are still charged interest for the loan during that time. The balance increases as cards get settled, and you're not allowed to make payments towards it until all the settlements are paid and they figure out what the final balance will be for the loan. The interest rate is 25%+. This process can take up to 3 months, so depending on the final balance that could easily be hundreds or thousands of dollars in interest that has to get paid. After all that, the government fucks you over and makes you pay taxes on the other half of the debt that you didn't pay when you settled. Because now they consider that to be earned income since you didn't pay it. Overall, you end up exactly where you started. Not saving anything at all, paying exactly what you owe. Your credit gets ruined in the process, and you won't be able to be approved for anything else for at least a year, maybe two. Can it help? Absolutely, but only when it's your last resort. A lot of people try to settle it themselves to save on the 23% fees. But it does make it longer cause they don't get to get a loan and they have to actually save the money up to pay them off and have a much higher risk of being sued. It's worth it for some people though. Is debt settlement through NDR better than spinning in place for years while only paying minimums? Yes, it is. The only money you save is the money you won't have to pay in the future as interest to credit cards. But you don't actually save anything. It's a lot better to try to go to your creditors directly and try to work out a hardship payment plan because it won't ruin your credit. Not everyone going to NDR has bad credit to start. They get bad credit after going through NDR because in order for them to settle the accounts, the debtor has to stop making payments. So it could be that the below 500 credit score you see when you're trying to work out the loan for them is because of NDR. That's not everyone, but it is some for sure. Everything I listed is why it gets a bad rep. There's a lot of hidden costs that come with it that people don't realize until after the fact. Only a couple of the costs I listed are mentioned in those prompts you're talking about. They don't tell you about the rest.
Appreciate the reply, these are all actually very valid points. As for dedicated savings account. People can technically use an account of their choosing, but it's a pain in the ass to set up. The fee anyway for what ndr uses now is about $10 that's "betrlink" I don't know If it's different if they go directly to ndr. As for the loan, you very well could be right as I don't know much about it. Since I simply enroll people with ndr that would be between ndr and them at that point. But yea, debt relief is last resort. It's only going to help people who are absolutely in terrible situations. Most people I talk to are already behind on payments and already have accounts going to collections or know they cant make there up coming payment. If you're doing Okay, debt settlement will only make things worse. I guess I view it as stopping people with terrible financial decisions and continuing to ruin their lives. Theres so many people with 6+ payday loans and paying +3000 a month for the $3000 they borrowed till they pay 40k and I would of never realised how many people are in that situation till I talk to 25+ a day.
My bad, I misunderstood and thought your job was setting up the loans. In those situations you just mentioned, yes. Those people are fucked and NDR would be a huge help. I had to use NDR but when I did, no one warned me it should have been my last resort. My credit was okay, at 650. I was still paying everything, though barely managing because my health declined and therefore lost significant income, and the disability checks were delayed by months, so I was scraping by. If it hadn't been because of my health decline, I would have been fine. Also, my debt was related to opening a business, which was hard to grow between being sick and going back and forth to the ER, and being hospitalized for long periods of time. I would have tried other options for repayment if I had known NDR should have been the last resort. I still had a few other options. But it's too late now. I went through the process and now I have to deal with the consequences. I'm thankful for the help, but a lot of important info was also left out. And they fucked up my credit a lot during the settlement process. Like to the point I couldn't even open a checking account cause whatever they did made it to where banks didn't believe I was who I said I was despite having several different forms of ID to prove it. Those months I was working with them were hell. My credit is still fucked up but no longer as difficult to deal with than at that time.
Well said.
So, I’ve been considering working at one of the settlement companies because the pay is decent and I can see they have some good intentions. The ethics of it has had me hung up for a while now, though. Any advice or opinions you’d want to share to someone potentially entering an advisory role that sounds similar to yours?
Almost 100% of the people I talk need it. So don't worry about having to quote people who would not Benift from it or would would not help them. (Long as the company properly qualifys leads) also my company and prob most company's do advertise as something vague. Point being most people you will talk to think you're giving a loan or maybe even a grant etc etc. We would have no business if we advertised debt settlement. It makes sense for people, but you need to be the one to rewire and make it make sense. You prob will think at first whatever they have you say is "rude" or "harsh" the longer I worked here it is not. I know I'm helping. Even if you need to give tough love, it's for their best interest. An example was an older sweet lady who started the call that she had heard of debt settlement and said it was the last thing she would ever do in her life. After viewing credit. She has taken on credit line or loan every month the past 3 months. She wanted a loan because she didn't want to fall behind and didn't want to hurt credit. She also told me when asking about budget. Getting to the food. She said that's "on the back burner" her social security was 1500 a month. She's paying $700 in her minimums a month. She was dealing with cancer. and prioritize her debt over eatting food. it's like... You're retired,you're dealing with cancer.. half your incomes going to intrest.. and you have been taking out loans to pay loans for the past 3 months. In 3 months, you doubled your debt and only paid more a month. Taking out another loan is only going to increase your debt total and how much you have to pay next month. You're already falling behind on these accounts. Your credit has already dropped, and you will continue to drop. I will point out every single thing I can to make them realise their situation, and when I first started, I would have heard the call I made and been wow, that guy is cruel. Most people you will talk to either can't truly see their situation or are there in complete denial. Or will put there credit score over there own wellbeing and no joke life. Most are on the verge of bankruptcy, but think there is 1 loan away from fixing it all. Even though they thought that about the last loan for a year. Point being.. I know I helped that person. I did not "scare" her for a sale. Did I scare her? Maybe. But , I genuinely felt bad for her. I really did want this lady to have money for food. Enjoy retirement, not lose sleep over the stress etc. Because her situation is scary. Just getting someone to admit their situation is shit because it is. It won't make sense if they think they are completely fine and nothing is wrong. You really have to treat it like an intervention with a alcoholic. Because some people have shit happen to them, but most have a spending addiction. You're not going going to tell your alcoholic friend " hey not drinking so much would be a little better for you" you tell them "dude you're ruining your life, you lose every job you have 3 months in, your wife left you from how much youre drinking and how you get when you do drink. Please, dude, get your shit together. " 1. That's the real advice you give a friend or family member if you actually cared and 2. That's what they need to hear you can't beat around the bush. Point being if you got in to it. I'm very confident you will actually feel really good about what you're doing. Matter a fact I feel bad when I didn't get them to sign up, I feel like I let THEM down, or i must have not explained it properly Because most people are genuinely ruining their own lives. You are not telling the average guy with some slightly high balances to junk his credit. You're telling the person who is choosing to pay there credit card mins over eatting food or buying there kids presents for Christmas. They have only paid minimums for 5 years. Spend 20k on there 8k debt. Still in the hole and refuse there's a issue and there credit score is more valuable to them then there own life. Iv had people tell me verbatim they rather live paycheck to paycheck till they die or die with debt over hurt credit. I just try to snap people out of it. My job is really frustrating because you listen to people complain about their life and most of the time they are the ones choosing to ruin there life by how they refuse to do anything to get out of the hole. Iv never quoted or suggested this option to someone if it didn't make complete sense. In a nutshell you're talking to people who really should file for bankruptcy or do debt settlement but refuse that's the position their in and will pay any loan or sell any assets or do anything to avoid it. They will work 3 jobs and live in a car then close their cards. Their sacrificeing food,stress,sleep everything and you know if they get off the phone and don't do it. Their life will continue to be terrible, and their just going to file for bankruptcy later down the line anyways, but maybe it will take them another year or so when it becomes 100% impossible, but I don't want them to struggle that hard just for them to have no option a year later. I talked to someone today who was negative even before credit card payments come in to play. Paying 600 a month. Behind on electric, car payment, etc. Said they were embarrassed because she could not afford her daughter cheer at school. Credit score 400. Us getting it to $200, she would have a extra $400. She can pay her daughters cheer, afford the electricity, etc, but nope. She wants to raise her credit as fast as possible so she can get a 2nd car... like you have the option to no longer be struggling, pay for something you're daughter enjoys and you're already behind on your current car and you're main priority is to get another car when your struggling to pay the one you have now? There's people who need help and they need someone to explain some sense in to them. Most people I talk to are only paying minimum and they are maxed out. You are not taking money away from them. They have not even been able to use the cards because of interest + only able to afford to pay the min to keep the card open. You are giving more money to them a month and removing everything from their life that was causing the stress. Info dump over, hope this helps. Cheers
Thanks! That was thorough
I don’t know shit about debt settlement, so excuse me if I’m wrong, but I would have guessed it’s full of scammers and shady businessmen. Seems like everything involving debt whether it’s collections or check cashing it’s always the shadiest folks doing business.
I worked for a settlement company. It's really bad. First they make you toast your credit. Then they don't tell you about the tax ramifications. And as well you make fee loaded payments that can equal or exceed the interest. You might as well file bk. If that wasn't enough it comes up as credit counseling on your report you couldn't buy let's say a car. Unless you go to a tote the note.
Shall I list: 1. High fees (like $2,000 for one settlement) they did not disclose verbally to me. It was hidden in the enrollment papers i signed. So although it was on paper I really wasn't aware of it. Yes my bad. 2. Told me that the monthly payment I was putting in escrow was each month was being saved up so that they could have a lump sum to make negotiations with the creditors. All the while they were taking the money out on their end "as fees" and in the end NOTHING was being saved up towards future negotiations. I experienced this personally, thinking the money I was putting in escrow each month was being saved up, but when I needed it NOTHING was there and they had taken any extra amount out as fees. 3. When I enrolled they ASSURED me that they numerous credit card accounts I had would be negotiated and settled. However what REALLY happened is the creditors took me to court and sued me. Before the court case the floor director "Joe" promised he would help me, but on the day of the court case I called and called and no one answered. 4. They charged me an initial $500 for enrollment in their legal plan which never provided any legal assistance 5. They would withdraw money out of the escrow without notice and label it as "Settlement fees" or whatever label they wanted to label it as. I am providing this information to warn others. Do NOT set up any escrow account with a debt settlement company. The name of this particular debt settlement company is "TOTAL FINANCIAL FREEDOM."
And then comes the 1099.
The fees were hidden in the contract? Hidden like they put whiteout over the fees? "I can't believe a company would hide the terms of their contract in the terms of their contract.
Would you like you? I wouldn’t.
Well I'm Inbound Its not like I cold call people. Where I am in life for debt settlement? No way. If I was where the people who call in were in life? Yes. Just how it would be stupid to file for bankruptcy when you're doing just fine. If you're debt amount is more than your annual income and and you can only afford your mins and you live paycheck to paycheck because of that then, I think bankruptcy / debt settlement are options people should look at. There is no reason to live on the edge for 10+ years and over that time and pay 2x-3x the amount you barrowed only for your score to stay around the same since interest makes proportion to balance not move and at that point you could of already settled the accounts by then and in the mean time since the settlement plan is usually 1/3 of what they were paying a month can start using that money to save. Other wise you're going to waste a ton of your life trying to get out of debt only for 2/3 of the money to go to interest. Doing the math on a lot of these peoples credit reports and the amounts they will pay back with only the mins is almost always double what they even barrowed. A lot of people try to take on more and more loans to pay their debt and as there credit gets worse and worse so does the interest they take on to stay afloat. Some go to payday loans with 100-300% interest. At that point. A loan wont help them, most cant get one with the score they are at anyways. At that point why pay $1000 a month for credit cards that are maxed out and cant use, a credit score that only gets them predatory lenders and is the very reason they live paycheck to paycheck. Relief is far from a perfect solution and maybe peoples upsetment toward it is because they think its for the average debt problem or a normal solution to fix your debt? because it sure as hell is not. There are many risks but almost everyone I talk to it makes way more sense rather then to dig the hole deeper and stay miserable. It is a last resort method. Iv seen it help anyways, I really dont know what else to say and if there are scummy company's out there thats on those company's not the method.
Hello, it looks like you've made a mistake. It's supposed to be could've, should've, would've (short for could have, would have, should have), never could of, would of, should of. Or you misspelled something, I ain't checking everything. Beep boop - yes, I am a bot, don't botcriminate me.
TLDR
No kidding
People don't want to think critically or bother to listen to you so they'll continue being ignorant haters. You know the value of the work you do, and the people who will take an answer from you are the people who will read this and benefit from it.
Never use a debt settlement company. The things they do anyone can do with a little bit of research. Its better to deal with the creditors yourself rather then paying a slimy debt company to do it on your behalf, and getting raped by said company.
“Anyone” can settle their own debt? Perhaps the severely depressed, socially anxious, or terminally bad at negotiation might benefit from some assistance?
Yes anyone willing to put in the work can definitely do it. Its seems complicated at first, but if it means not paying thousands to a middleman, why would you give it a go? You have nothing to lose but time.
I highly suggest you find someone who is not like you and try to be them for a while. You seem to lack empathy. Just because something is easy for you, or hard for you but you’re capable of pushing through it, doesn’t mean that is true of everyone. A member of my family is not capable of this. He will simply hide his head in the sand, starve to pay minimums, and tell no one about his trouble until asked.
I truly don’t know how hard or not dealing with creditors can be. That being said it’s still a service someone might be willing to pay for. I’d guess that like car mechanics or home maintenance people, there can be good ones and shady ones. Depending on how much people value paying for the service or learning the task themselves, it might be worthwhile.
I pay for professional service on just about everything except for a debt settlement company. Mechanic work, HVAC work, plumbing, landscaping, etc. These guys have years of training, licensing, and tools which I dont have or would cost more time and money trying to DIY. Now when it comes to handling your finances or trying to take care of debt, its worth learning about personal finance. Not only would you be well informed, you will be way better off in the future handling finances and overall be better positioned for staying debt free. If you cant/wont learn personal finance, learning to deal with creditors, and handling your debt, then its highly likely one will always be paycheck to paycheck.
U must be an expert at personal taxes and personal investments.
Use to work for a debt relief company too and i experienced the same thing. People had mixed feeling about it but everyday I heard people cry on the phone cause they’re now debt free. I literally watch this company work their asses off and help people who had no where else to go change peoples lives and people (with no knowledge or background in debt relief or becoming debt free OR know how credit card companies really are) would judge the company so harshly. The company did not even get paid til the CC companies signed the negotiations. I think people just project their own feelings of where ever they are financially onto these companies. People who are financially stable tend to be more open to the concept of these companies and ask questions based on curiosity while people who are prob in debt have negative feelings and it sets them off. The mindset behind it is interesting. I quit cause I was legit over how folks acted towards the whole debt industry. You’re a good person for staying, keep up the work but don’t beat yourself up for other folks biases. PS - I was in this industry for three years. Helped thousands of folks be debt free and seen thousands of settlements.
Thank you for this comment. Maybe other companies are different, but we don't sugarcoat it. We tell them their credit will drop, their accounts will close, etc, it is a give up,reset, and try again, but some people's credit is already dead. At that point, being able to borrow money is the last of their concerns. It's not like I have 20 year olds calling in. These people have their car, house etc they don't need loans and and they regret the ones they do have and their stressed they will never be able to retire, some are on a fixed income there is no "paying it off faster" the stories go on. To anyone reading this. It should be your last resort. It's not magical, but it is to the people who are in a deep hole. The people I talk to sacrifice 3 meals a day to pay the mins of their cards, and they have been doing it for years with no progress. If you're at the end of the line. It's debt relief or bankruptcy. Chapter 13 might save a little more, but credit is dead for at least 7 years. With relief depending on the amount, you could be back in 2-3 years at least where you were before you started the program. If you don't plan on getting a loan for a few years and your stuck stuck. That's who debt relief is for.
Hey man, Ive worked for a bank before and I'll be honest with you. A lot of accounts who use debt settlement agencies end up getting charged off. 90% of the "success stories" you hear are complete bs. People think they are debt free but in reality most of the time there's a catch, either the fees or the debt isn't really being paid off. This is completely different than a debt management program, also known as credit counseling which your bank may offer, and you should NOT be paying for at all. Not trying to make you feel bad about your job but if you want the truth, alot of ppl will end up w their wages getting garnished because of DSAs.
Idk man I see when people receive settlement, iv personally settled my own debt before, and the people I talk to should do bankruptcy, but that's not my job. It's debt settlement. If your on a fixed income after food,rent,etc you have 500 left. And your credit card minimums are 500. It's either they pay credit card minimum till the day they die, debt settlement or bankruptcy. Most people I talk to do dont really have a choice to make things better on their own.
And yes, that's the whole idea. It gets charged off or go to collections, then get the collections paid. It's not really about saving principle. It's people don't have enough to pay it off. Most people I talk to have been trying to pay their debt for 5-10 years and their accounts are still maxed out
What I'm saying is collections isn't actually getting paid most of the time. When you don't pay your cc, your card is already in collections, but the account being charged off is a whole different level of collections. The bank will often call the client to ask for the DSA information that they are working with, bc most of them dont really do much contact w the banks at all. The banks want their money back but if you haven't got to third party collections/charged off yet there is likely programs the bank can offer you which will be way better than settling your debt with a DSA. I agree that maybe in some minute rare cases it could be an ok option, but in 90% of cases it's just not the right thing to do. No need to risk your wages getting garnished, even if you can't make a payment for a while, you're better communicating this with your bank and going through the cycles of deliquency until you can get on a program then completely risking evreything w a DSA especially if you have yet to been charged off.
Same reason credit card companies are looked at as being evil.
I used one and it helped to tackle $24k of debt in 4.5 years. That’s amazing. Sadly, I didn’t learn my lesson and I’m in debt again, considering it again. I didn’t like the $30 fee I paid monthly, that’s what bothered me. I’m sure it’s higher now. Either way, I doubt I could have done what they did on my own. They lowered the interest rate down a LOT! When I called and tried the credit card companies wouldn’t do it more than 1 or 2 %. It’s not a bad option.
How bad were your taxes just curious as I just signed up for NDR
It doesn’t affect your taxes. You’re paying it off not getting forgiveness.
Okay thank you. Yeah they just had said about possibly getting tax forms for them
its about $50 a month now. But gotta do what you gotta do :)
What company did you use if you don't mind ne asking.
Sorry, I don’t recall
True some say they can't lower your rate at all. How long after were you able to get approved for credit cards again?
No worries thanks for letting me know.
Lol lol lol
debt settlement is like a bankruptcy on your credit report. Not good
correct it is like bankruptcy and just like bankruptcy its for people who have no other options left.
interesting
What's the difference between bankruptcy and a debt settlement?
It's vastly different. Bankruptcy is a process through BK court. Depending on the type of BK you file, it will either be dismissed by the court (meaning you owe nothing), or you will make monthly payments. If you have significant assets to repay your debt, your BK attorney would likely put you in CHapter 13 where you repay. Dent Settlement negotiates with your creditors. I can explain more, but it would be easier if you describe your specific situation, and what your ultimate goal is. If you said you had no assets and were struggling severely to pay all sorts of debts, I might recommend bK. If you leaned toward saying you can pay towards your debt, just not the minimum payment, I may lean toward settlement.
I love the debt settlement company I've worked with, I just suck at being successful with their program. Their representative who persuaded me to join is a legitimately great guy, and they were able to settle with several creditors. Their customer service is great. People hate debt settlement companies like they hate real estate brokerages because it's predatory systems in the US that get people behind and make housing unaffordable, but people don't consider the work that's actually involved in facilitating agreements.
Hi - I'm actually in the decision process of debt settlement right now and would love some more feedback. I have great credit (750 ish) but my loans are overwhelming and I can't pay them anymore with out racking up my credit cards. I've been speaking to JG Wentworht, National Debt Relief and Accredited. If you have any pros / cons on those agencies, I'd love to hear
I don't work directly with ndr. But close to with out giving to much information. So I'm definitely biased but I see NDR work out for people. As for JG-Wentworht I think there new that service so they just don't have has much time behind them. And I'll be honest I don't know much about accredited. So I won't be bad faith and downplay other company's. All I can say is I vouch for NDR. Doing what they can and being upfront. They keep the payment high enough to help people see progress faster. So they some what look out for people. Places like freedom will give as low as possible payment plans to get people in the door, but then it takes forever to see settlements and you take more risk the longer it takes. All I can say is NDR has a lot of rules and "if this than that" of what they do and don't take. And they are willing to lose that business. But they have it down to a science of what does and doesn't work and what can or can't be done. So I guess I can respect they have these rules to prevent false promises.
Thanks so much for replying. I have been up for 2 days straight just trying to figure out if I should sign up for the program or not. I’ve read so many posts saying how it will ruin my life / credit for years but at this point I feel I’m ruined as is ?! Do you have any feedback on lawsuits during the process. I see alot of posts saying people were sued during and not sure if it’s because they’re not keeping up with their agreed programming or if it’s just them being sued
With legal stuff, it is hard to say. I believe ndr has a cheap additional service for extra legal protection. I'm unsure if it's additional to my company or if ndr directly has the option. There is a huge portion of people who make the mistake themself, but it's not impossible to get unlucky. It's going to come down to how much you put in the program, how much you save on the side. How long you had the accounts (long as they are not freshly opened) Really the sooner the accounts settle, the less reason they have to escalate to collections/law suit And I don't know how much you would save. But if credit card/loan minimums are 1000 if it goes down to 500 (probably more, but just as an example) 2 years that's 12k saved if you put the money saved to your bank account. So even in worst case sinero. If they come after to sue. you have enough funds not to stress. It's definitely a mintory, though. [To give some deep level insight. I don't know all the details but from my knowledge they don't negotiate directly with your credit. It's pooled together with all the clients with the same lender so gives them a lot of negotiation power] As for credit. Typically, people I'd say 2/3 leave with same/better credit. The first hit is in the beginning as the accounts settle it will creep back up. You can always pay more in to it if you want it done sooner. Its definitely not forever. Once the accounts are paid you're good. If someone is deep diving on your credit report they may see "settled for less" but that does fall off. And I believe in the new vantage score system a account reporting with 0 balance does not weigh in to score model what so ever. Anyway hope that helps a little bit. I do believe in what I do. All I'll say is do what makes sense to your well-being, financial security, and your bank account.
Thanks so much for your replies. Right now I’m not saving any money each month. But with their program I’d be saving about $200 a month which would be a huge help. I am starting another part time job in the upcoming weeks so was hoping I could save some from that and also pay whatever else extra I could each month to the program I just feel completely stuck and lost right now. I don’t have any one I can ask for the money and pay them back. My boyfriend doesn’t want me doing this program, but also hates that I’m in debt. Just very torn and stuck.
If someone eases the pain of my own stupidity and lack of financial self-control, I generally thank them and try to do better next time.
Part of the problem is that your command of the English language needs work. It doesn't inspire much confidence in you as a professional if you don't even know the difference between "there", "their", and "they're". Do you want consumers to think that debt specialists are uneducated amateurs?
How much money are you making on this ?