Is this normal?

Settlement companies generally charge an average of 15% of your beginning debt as a fee. The program I am in, half of my payment every month goes to the company, and half goes into an account to settle debts. In a standard 3-year program, I think after 20 or so months the fee will be paid and all the money then goes to covering the debts. This is a better plan, rather than some companies that want their fee all up front first, and you have nothing to settle accounts with for well over a year. This way, you are accumulating funds from day one to settle your accounts with.

That said, I received a contract with all this spelled out, even a monthly chart that showed where all my money was going. I knew ahead of time about the fee, the monthly payments, and the process. It's standard procedure. How on earth could you have not known all that?? I hope you didn't just sign up without reading anything or doing any research first, in the hopes of finding a quick fix. Settlements don't work that way.

It sounds like the process is working the way it is supposed to. They now have 1500 to start settling your accounts; every month that will grow until one is settled, then you build it up again. The accounts are settled in the order in which creditors are persistent, or come in with a really good offer, or to settle before a court date. Timing is everything.

SusieQ is absolutely right. Average charge is about 15% spread out over 10-15 months in fees. While the companies are collecting, you should be saving the difference; and obviously the more you put in, the more you accumulate. If you can add more into your account let the company know you're working with about the additional funds.

Thank you for above responses...
I do know it is 15%, what im not very clear is how it is deducted from my payment. but now, it sounds like im in the right track.

It sounds like you are on your way. Hopefully you will get a settlement offer soon!

This may be a comment for a different thread - but I would argue that if these places really stood behind their claims, then they wouldn't have to charge a penny until they actually got some results.

A good point DebtCruncher which I've thought about. IMO two things might occur: DS companies may not disclose actual settlements and severely rip off consumers; for instance settlement in at 25% and company reports 50%. Also for the company itself it could potentially be an account receivables nightmare; and instead of concentrating on their main job, they'll need a separate department for collections.

A shady debt settlement company could do that, absolutely! Isn't that what happened with Sifxpert? But a good company will show you the actual contract with the creditor, and I know by my final statements, what is shown on my credit reports, and the 1099s I've received, that my settled accounts were accurate. Personally, I don't have a problem with paying a fee as I go along, as long as they are doing good work on my behalf. That's why you have to do a lot of research and get involved with a company with a good reputation.

There must be a bunch of greedy settlement companies out there. The one i used had no upfront fees that i remember and only charged me a % of the settlement when a settlement was made. If they made a settlement and there was not enough left in the account for thier fee, they waited. I wouldnt have been comfortable paying them that kind of money upfront nor could I have afforded it at the time