Changes expected in the debt settlement industry
Date: Wed, 05/27/2009 - 15:56
I need information on Liberty Settlement. Is it Up and Up or a
I need information on Liberty Settlement.
Is it Up and Up or a scam !
op is right
gov. cuomo supeoned many of the top ones and is starting a big investigation. just google it, it was an article in a ny paper
I'm not a collector but an owner of a DS Company. Insider info t
I'm not a collector but an owner of a DS Company. Insider info tells me a radical change in the next 10 to 18 months. AG Cuomo is part of it and simply gathering his discovery. Put it this way, no company gets subpoenaed by an AG and survives. There are also non governmental group lobbyists putting a Bill together that will only allow a DS company to charge $400 per client or 4% of the total debt, or whichever is less. There are only a handful of DS companies that can absorb this change and survive. It happened to the CCCS industry, now it's the DS industry's turn. No one can disagree that the DS industry in the Wild West and needs reform. This is my fair warning not to keep all your eggs in one basket. Start looking for other opp???s on the side???
This Bill will not be state specific but NATIONWIDE... just like
This Bill will not be state specific but NATIONWIDE... just like CCCS
debt
I am with Halo and have been with them three months B of A wants to settle already and there are no funds because Halo gets paid first...B of A will settle for 50%. I am seeing where people can hold out for as low as 17% but if I pay Halo and then how am I going to pay any creditor? I asked Halo if I could do bankruptcy is I get sued by one of these company's and they said they would not allow me to do so because I am signed with Halo...is this true do they own me for the whold 3 years or can I opt out when I want? How am I going to put creditors who want 50% of $15,000 in four payments and pay Halo if that were a possibility then I would have done it my self..which is exactly what I have told Halo but no answer from them yet. HELP SOMEONE PLEASE!
So they'll go offshore or pretend to be Indian tribes . . . just
So they'll go offshore or pretend to be Indian tribes . . . just like payday lenders do.
Or they'll pretend to be law firms like Lexington Law does with
Or they'll pretend to be law firms like Lexington Law does with credit repair or {self-deleting before the Mods jump in and erase/lock the thread} already does for debt settlement.
I have discussed this in some detail on this thread. The particu
I have discussed this in some detail on this thread. The particular post of this link is to the Testimony to the House for HR2309 - The Consumer Credit and Debt Protection Act.
So yes, they will need to reform or die. The FTC and the State Attorney Generals have received a lot of complaints about DS companies and others like it that are taking advantage of the flailing economy.
The legitimate and honest ones have nothing to fear.
And the new Legislation will make it even easier to close down law firms because an attorney can be easily disbarred for disobeying the law, or at the very least will have a nice black mark on their Bar records that will follow them around like a crazed pekingese.
I find it doubtful that your negotiating company has any say reg
I find it doubtful that your negotiating company has any say regarding bankruptcy. In fact, if anything, I would think a bankruptcy judge might order the negotiating company to return some of the money (to the court) they have collected from you.
Hardly. The market is huge right now and is going to get even bi
Hardly. The market is huge right now and is going to get even bigger in the short term. The fight is not against the method or the companies themselves - anymore than payday loans, junk debt buyers, collection agencies, or credit counselors, etc. etc. The fight is with those who would be dishonest with the customers and those that would rip people off.
Period. Lie to people and mislead them and you go down. Simple as that.
Bill aims to regulate debt settlement firms, protect consumers
Bill aims to regulate debt settlement firms, protect consumers
12:00 AM CDT on Monday, April 13, 2009
PAMELA YIP
Debt settlement companies, which have grown by leaps and bounds, are the target of proposed legislation that would set strict rules on how they operate.
These companies typically negotiate with a consumer's creditors to settle debt for less than what's owed. Financially distressed consumers have flocked to them.
But regulators have accused some debt settlement companies of unfair and deceptive practices.
Most recently, Texas Attorney General Greg Abbott sued Credit Solutions of America Inc. in Richardson, accusing it of defrauding Texans by failing to negotiate settlements with its customers' creditors.
Credit Solutions officials said they're committed to customer satisfaction and aim to reach an "acceptable resolution" with Abbott's office.
Regulation of this industry is scarce. Although the Federal Trade Commission held a workshop on debt settlement companies last year, it hasn't proposed a law.
So a nongovernment entity has stepped forward.
The National Conference of Commissioners on Uniform State Laws has put forth the Uniform Debt Management Services Act, which gives states guidance on the regulation of the consumer-debt management industry.
The Chicago-based group's legislation would require debt settlement companies to:
??? Register with states. (It also would mandate that each state appoint an agency to administer registration.)
??? Give consumers a list of goods and services to be provided and charges for each.
??? Tell consumers the fact that defaulting on debts can lead to lower credit scores and increased charges.
The bill would allow debt-settlement companies to charge a set-up fee of no more than $400 or 4 percent of the client's debt, whichever is less, and to charge monthly service fees of no more than $50.
Debt settlement firms also would have to obtain $250,000 of insurance to protect against the risks of "dishonesty, fraud, theft and other misconduct on the part of an employee or agent of the provider."
The proposed law is being sponsored in Texas by state Sen. Kevin Eltife, R-Tyler.
"Particularly in light of this economy, I feel this consumer protection is necessary," he said.
Michael Kerr, legislative director of the commissioners group, said, "Texas is a key state," because many debt settlement companies do business in the state.
In fact, Texas, California and Florida have the highest concentration of debt settlement companies, according to the Association of Settlement Companies, an industry trade group.
"Reports of abuse by debt settlement companies have risen in frequency over the years, particularly against for-profit debt settlement entities," Kerr said. "Because most states do not currently regulate for-profit debt settlement companies, it is difficult to obtain concrete data on fees, success rates, and settlement outcomes."
Debt-settlement industry officials say they support the proposed statute.
"There are companies out there that are not really doing a good job at representing the consumers whom they sign up, and we think that does give the rest of us a black eye," said Wesley K. Young, a member of the executive board of the Association of Settlement Companies. He's also general counsel of American Debt Exchange Inc., a Dallas debt-settlement firm.
The bottom line for consumers? There's no easy way to get out of debt. It takes discipline, sacrifice and a laser-like focus on your goal to be debt-free.
dallasnews.com/sharedcontent/dws/bus/columnists/pyip/stories/DN-moneytalk_13bus.ART.State.Edition1.4a6766b.html
"another post of BS by a humanoid.i love how they tell you to lo
"another post of BS by a humanoid.i love how they tell you to look it up.give us a link if it is legit.never hear anything of the kind until now."
BS? You are a GD Moderator on a forum mergel. I am buried up to my eyeballs with attorneys, reform, laws, banks, debt collectors and the like on a daily basis. I'll tell you this right now, 90% of this forum is garbage here say from people like you who don???t know shit. I am simply being courteous giving you folks the heads up so when it goes down you're not wondering ???what do I do now to feed my family????
Goodbye and good luck in the future.
Again, the doomsday scenario is hardly predicated upon the facts
Again, the doomsday scenario is hardly predicated upon the facts.
Quote:
Debt-settlement industry officials say they support the proposed statute. |
That should have clued you in right there.
Credit Counseling and Debt Settlement Alert - From the U.S. Cong
Credit Counseling and Debt Settlement Alert - From the U.S. Congress
From the U.S. Congress
In addition to pending bills to reform credit card lending practices, there are several other proposals of importance to the counseling and debt settlement industries. Below we highlight just a sampling of the many proposals that are under consideration by Congress:
Bill Introduced to Direct the FTC to Regulate the Debt Settlement Industry; Hearing Held
On May 7, 2009, the Consumer Credit and Debt Protection Act (H.R. 2309) was introduced in the U.S. House of Representatives to provide authority to the Federal Trade Commission (???FTC??? or the ???Commission???) to conduct rulemakings on an expedited basis concerning consumer credit or debt, specifically directing the Commission to promulgate rules with regard to debt settlement (broadly defined). The bill also would expand the FTC???s enforcement powers by allowing it to seek civil penalties in connection with unfair and deceptive acts or practices relating to consumer credit or debt.
A hearing on the bill by the House Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection was held on May 12, 2009. The bill is authored by Subcommittee Chairman Rep. Bobby Rush (D-IL) who previously held a hearing on this topic in March 2009. [1]
Over the last several months, the FTC and others have requested that Congress provide the Commission with expanded rulemaking authority and enforcement powers related to consumer credit and debt, as provided for in this bill. The bill does not, however, specifically direct the Commission to consider regulations for any specific consumer credit and debt-related products or services???other than debt settlement services and automobile sales.
In its present form, the bill would have a significant impact on the debt settlement industry and providers of other forms of consumer financial services, including credit counseling agencies that offer less-than-full balance repayment plans.
Moreover, the bill would enable the Commission to play a greater role in the oversight of consumer financial services related to consumer credit or debt. The Commission would be permitted to use this expedited rulemaking authority to issue rules covering the entire range of consumer financial products and services within its jurisdiction, either directed at consumer financial products/services in general or specific industry subsets (e.g., payday lending, mortgage servicing, credit counseling agencies, credit card marketers and advertisers, and credit repair companies). In addition, the bill would enhance the Commission???s ability to prosecute cases against such companies.
The Consumer Credit and Debt Protection Act contains several specific provisions of interest to providers of consumer financial products and services, including:
??? Permitting the FTC to employ notice and comment procedures to establish rules pursuant to the Federal Trade Commission Act that set forth unfair or deceptive acts and practices relating to consumer credit or debt, rather than rulemaking processes that are more burdensome on the Commission.
??? Directing the FTC to examine the practices of ???debt settlement service??? providers and to establish such rules as the Commission determines necessary to prevent unfair and deceptive acts or practices of such providers. The bill also requires the Commission to consider adopting rules that specifically:
o ???prohibit the charging of fees to consumers prior to any debt settlement service being fully rendered and limiting fees that may be charged after a settlement with a creditor is reached???; and
o ???require disclosures before a contract is signed regarding the fee structure, expected time frames for a successful settlement, success rate of debtors in settling their debts, information about creditor participation in settlement plans, and the potential impact on a consumer???s credit score.???
??? Defining the term ???debt settlement service??? (broadly) as ???a commercial service provided to assist consumers in managing and repaying consumer debt, including the offering of advice or acting as an intermediary between a debtor and one or more of the debtor???s creditors, where the primary purpose of the advice or action is to obtain a settlement for less than the full amount of debt owed.???
??? Requiring that the specified required rulemakings be commenced within six months of the date of enactment of this bill.
??? Authorizing the FTC to obtain civil penalties for unfair or deceptive acts or practices relating to consumer credit and debt, and providing authority for the FTC to bring suit in its own right in federal court to obtain civil penalties.
??? Authorizing States to initiate civil action on behalf of their residents to enforce the provisions of the FTC Act (or any other Act enforced by the FTC) to obtain penalties and relief provided under such laws, whenever the attorney general of the State has reason to believe that the interests of the residents of the State have been or are being threatened or adversely affected by a violation of a FTC rule relating to consumer credit or debt.
venable.com/credit-counseling-and-debt-settlement-alert---from-the-us-congress-05-12-2009/
PUT SIMPLY, IF A DEBT SETTLEMENT COMPANY CAN???T CHARGE FEES UPFRONT, THEN HOW IS A COMPANY GOING TO PAY ITS OPERATING EXPENSES? MOST CAN???T. GOODBYE DEBT SETTLEMENT COMPANIES.
IF YOU???RE STILL IN DENIAL, WAIT UNTIL THE BILLS ENACTED???
Insider is correct, in my opinion, that "change gonna come".
Insider is correct, in my opinion, that "change gonna come".
To think otherwise, is to ignore the last 12 months of change and regulatory action. The next 12 should prove to be more intense.
The state by state changes are a given and well under way.
My question remains, will fed action be, or have the effect of being, preemptive of state action.
The shape this is taking right now, from my view; the federal guidelines will be a minimum guide for operations and the states can, and will, have additional rules that will guide the industries actions.
Fee caps will clobber the industry model that has been operating on a cost per acquisition of $600 plus. The expensive live transfer area of lead generation will become less expensive, or disappear. The 30-45 minute close/capture will be gone, as it will finally be recognized as the path to hot water that it is, and has been. The high commission, 60%-80% front end payout to the referring call center sales company will be unsustainable (it already is).
The industry will not be going away. It is going to shrink though.
Mileage may vary.
I'm in a debt settlement program, and everything the above posts
I'm in a debt settlement program, and everything the above posts list as now having to be disclosed ahead of time, my company already did. I feel comfortable that they are playing by the rules, that's why I went with them in the first place. Personally, I think the majority of settlement companies are scams, and these rulings will slam the door on them. It will then be easier for the consumer to find legitimate ones. As someone in a successful debt settlement program, I think this is all good news.
Quote:PUT SIMPLY, IF A DEBT SETTLEMENT COMPANY CAN???T CHAR
Quote:
PUT SIMPLY, IF A DEBT SETTLEMENT COMPANY CAN???T CHARGE FEES UPFRONT, THEN HOW IS A COMPANY GOING TO PAY ITS OPERATING EXPENSES? |
Anyway, this regulation is good news. Then people who *want* to pay for the service can do so with a much lesser risk of destroying their lives and dragging their credit through the Colosseum (as in Roman). In a perfect world, it wouldn't be necessary. But we don't live in that world, and it *is* necessary.
According to the Federal Reserve,Americans carry around $2.56 TRILLION in consumer debt, a large percentage of that being credit cards. Around 4 million people have lost their jobs in the past few months. So not only is the doomsday scenario unwarranted, it is plain not going to happen. The Debt Settlement industry has barely even begun. The only difference will be the rip-offs.
Not to mention, USOBA (The US Organization of Bankruptcy Alternatives), a leading debt negotiation association has been on the forefront of these new legislations.
I discuss the industry in great detail in this thread: TASC Fights the BBB.
Good news for consumers. Bad news for debt settlement companies.
Good news for consumers. Bad news for debt settlement companies. Out of the 2000 or so DS companies probably only 10 ??? 15% will be left standing. This new bill is designed to put debt settlement companies out of business, and that???s what is going to happen.
In the future, I imagine that most DS settlement services will be done through a CCCS or a private attorney. And if done through a CCCS, settlements of 80% will likely be the status quo. Then after settlements have been paid, good luck collecting your fees. Maybe the consumer can put their debt settlement fees in a debt settlement program?
As far is TASC is concerned, that whole group of shysters should be shut down. The TASC board members run some of the worse debt settlement companies out there. I know. I???ve spoke with TASC member company reps, read their contracts, and quite simply KNOW FOR A FACT that their agreements are misleading and for the most part UNDER DISCLOSED ??? and they are claiming to be on the forefront of honest business. What a joke. I definitely will enjoy seeing the door hit them in the ass on the way out.
Run your business like a greedy shyster and ruin it for everybody.
Well, only if someone doesn't want to repair their credit. I mea
Well, only if someone doesn't want to repair their credit. I mean, think about it - you are a prospective lender, looking at a credit report. It shows a bunch of "Settled for Less Than Full Amount"s. And then it shows a nice hairy black mark from - what? A Debt Settlement company? Would *you* extend credit to this person or would you consider them a cheat and a crook and deny them credit?
No, I don't think that would be nearly as much of a problem as you think it might. Most people who do settlement do it because they think it's better than bankruptcy (it often isn't) and they want to clean up their credit (which it sometimes won't).
As far as TASC, a poster on that other thread named some names from the Board and said they were the ones indicted by the New York Attorney General. I did not investigate that particular claim, so I can neither confirm nor deny it, but it was interesting indeed.
And here USOBA looks like it is going to take its place at the top of the heap because it has been proactive in trying to clean up the settlement industry and has actively lobbied for regulation of the industry. A forward-thinking organization like that will go far as long as it keeps proper business practices in front & center at all times. In fact, USOBAs yearly meeting will have the FTC appearing! Since Federal Laws take so long, USOBA has been knocking on Attorney General's doors and State laws regulating the industry are being passed left and right. I am planning on reporting that on the other thread, but it is happening so fast that it's hard to keep up (nearly half of the states are either in the process or have already enacted regulation of the DS industry - some of them, like Minnesota and New York downright calling them a fraudulent industry! (And they both recommend a CCCS, also.)
Look, if they weren't so dishonest it wouldn't be a problem. First, debt settlement isn't for everyone. Debt Management is perfect for the vast majority of those in debt, then comes bankruptcy, and then comes debt settlement. Yet they sign them all up for DS - even those that offer bankruptcy - because DS is more expensive (if you have more than $15K in debt, Settlement will cost you more than Bankruptcy in every way - except for privacy) and hence the profit motive is high. Secondly, they say that a company can get far better deals than you can on your own - which is a blatant LIE. Plus, they compare themselves to a trained profession (like an auto mechanic) which is total misrepresentation! Thirdly - and this is the one that has Attorneys General up in arms - they tell people who are on time with their payments to stop paying their bills! Fourthly - they downplay the damage to the credit report by telling the mark that they can hire a credit repair firm (for another fee, of course!) to get rid of all the black marks (which is NOT true)! In fact, the FTC, in it's yearly report of the Complaint system, says that the majority of complaints it gets are not illegal at all! For instance, it mentioned that it gets a lot of complaints by people who settle their debts and find out that they can't remove the black mark from their credit report! Because you *can't* remove factual information! (Credit repair organizations are also involved in these investigations - and they are also *far* more dirty....)
The companies that do not tell these lies and are honest with their customers/clients and *actually* put the needs of the debtor *first* (over their own profits) will shine - in fact, will probably get the free advertising of being mentioned as an honest company (since I believe that they will *all* eventually get investigated)!
But I think you are spot on the rest of what you said. Yes, it will hurt the industry. But as long as the negative attitudes in society against bankruptcy hold, there will be flocks of people waiting to settle their debts and not wanting to go through the hassle of doing it alone. So they will wish to turn to a company to help them. As it stands now, their fears and insecurities are deftly played with for the profit of the company whilst the debtor's credit sinks lower and lower and then they end up having to file for bankruptcy anyway! At least the hapless debtor can trust in a company to provide the best service *for their needs* instead of jumping out of the frying pan and into the fire!
And one more thing to add: most people will never know about the
And one more thing to add: most people will never know about the regulation. Just like the protections we have against inaccurate information on our credit reports and false debts - these laws don't stop these idiots from perpetrating their crimes now do they? I'm still dazed that collectors actually say that they are going to send people to jail and that people *actually believe them*. It astounds me. (Then again, I went to private school where we learned Civics and Government and Business and History...)
So this regulation will change only one thing: it will give more venue for the intelligent (and the desperate) to defend themselves against being ripped off. The rest will simply carry on as they have always done... As long as there is a dollar to be made - by hook or by crook - then it *will* be made. For example, look at these collection companies and PDLs that have been sued and fined and yet continue with their nefarious practices.
Hey Chrys, Great points. You have been on a roll lately. On a f
Hey Chrys,
Great points. You have been on a roll lately. On a few things, I would not say I outright disagree, just that I have some perspective and data that would make some of your points not so easily black and white.
I have been busy of late, but will be following through with connecting with you in an email after some travel is out of the way.
All debt settlement companies are rip-offs....period. They char
All debt settlement companies are rip-offs....period. They charge a service that people can get for free. After fees charged by the settlement companies the person in debt always ends up paying more and increases the likelyhood of being sued tremendously. I am currently involved in 4 different lawsuits involving these companies with the worst story being a woman in her 60's who sank 18k into a settlement company over 3 years that settled nothing for her. They are trying to withhold her money for "services rendered". If your smart, call your creditors and offer settlements you can afford while trying to make tiny payments on your other bills. The conclusion of my 2 year research shows creditors are now settling accounts lower for people working direcly with them. Good luck to all.
who is the most honest debt settlement company to use as this ti
who is the most honest debt settlement company to use as this time?
So if lets say they will do that in TX, may peoples from another
So if lets say they will do that in TX, may peoples from another states use they service?
I settled my credit card debt with one of these DS companies....
I settled my credit card debt with one of these DS companies....WHAT A HUGE MISTAKE. If I had it to do over again I would do anything not to get involved with them. They charged me huge sums of money, got me sued three times (which required me to hire a lawyer) and I ended up settling three of my credit card company debts myself. This was a BBS approved company. Worst mistake of my financial life.
Sorry for your experience.I am grateful I decided to do this mys
Sorry for your experience.I am grateful I decided to do this myself. In my case, I simply felt I could do the best job negotiating for myself. But it has been a lot of work...and is having a lot of payoff.
Like I said, GOODBYE DEBT SETTLMENT COMPANIES! http://www.ftc.go
Like I said, GOODBYE DEBT SETTLMENT COMPANIES!
http://www.ftc.gov/opa/2010/07/tsr.shtm
For you people that think it is so easy to settle your debts on your own, you have NO CLUE. People that say that are either debt collectors, or don't understand the business at all. Yes, it is possible to settle your debts on your own, IF you know EXACTLY what you are doing. I get calls EVERYDAY from consumers who did settlements on their "own" just to discover that they made a huge payment to a debt collector that had no "real" legal right to collect on that debt. And what's worse, they get a bill from another debt collector months later for above and beyond the initial principal balance. I'm sick of getting calls like this and morons are saying "you can do it yourself". Again, no clue. My advice, if you have debt that you want to settle, and are not 110% sure how to go about it.... GET AN ATTORNEY EXPERIENCED WITH DEBT NEGOTIATIONS!
Oh bologna! It is much much better to settle your debts yoursel
Oh bologna! It is much much better to settle your debts yourself. Most creditors now won't deal with these companies and just automatically sue the debtor once they find out they have hired a ds company. This forum is full of stories of people who paid these ds companies for months or a year and then found out they never even contacted the creditors because they had to get their money first and there is no money put aside to pay the creditors until after that. And then when they get sued the ds company says they can't help them.
Here's another stat. If people settle themselves they can do it in as short as 90 days. but using a ds company it can take years. They are total rip offs except for maybe the ones that just provide advice to you on how you can settle them yourself.
Hi Insider, You posted a link to the FTC and stated that debt s
Hi Insider,
You posted a link to the FTC and stated that debt settlement is dead.
It isn't, its just that one of the most pernicious practices by debt settlement companies - well documented to cause harm to consumers on this board - is now dead.
No charging upfront fees for debt relief services starting 10/27/10.
You encourage people go talk to an attorney. I agree with you.
To be clear though, unless the attorney you speak with meets the exemption in the new TSR's, they are also banned from charging upfront fees.
To Be has it right by the way. It is generally much better to settle your debt on your own when you are confident you can do so.
Mileage may vary
How's someone going to payoff 100K debt in 90 days with $2000 ex
How's someone going to payoff 100K debt in 90 days with $2000 extra per month you moron? After the original creditor charges off and sells the debt, how do you know if the debt collector attempting to collect on it is legally allowed to? Do most consumers know how to facilitate a writen agreement to resolve a debt via settlement? Do most consumers know their rights regarding debt and debt collection laws? NO!!!! They need professional help and not from a misinformation forum like this and certainly not you moron. Also, people need to ask questions, do research, and READ AGREEMENTS before signing up for a rip off company. Dahhhhhh. You think if an idiot can't read an simple agreement or do simple research that they will know how to deal with cut throat banks and debt collectors??? How retarded are you?
"To be clear though, unless the attorney you speak with meets th
"To be clear though, unless the attorney you speak with meets the exemption in the new TSR's, they are also banned from charging upfront fees"
Most attorneys with a real practice are exempt. The ones that solely provide ds services are not exempt.
Also, this new law WAS NOT designed to help consumers. It was designed to kill the companies that were taking their money.
I agree with debtinsider, the rule was definitely designed to ki
I agree with debtinsider, the rule was definitely designed to kill debt settlement companies. Whether that's a good thing or not is a matter of opinion, but the fact is that debt settlement fees are like gym membership fees. Gyms make money on the 90% of people that sign up and never come in the door to use the equipment. If everyone did show up, they couldn't possibly service them all, the stuff would break quickly, etc. The debt settlement companies get fees from the people that save their money, follow the programs and get settlements. But that is nowhere near enough to cover the costs of renting space, hiring the staff, marketing, etc. For that they need the fees from people that sign up, make a few payments, never save a penny and then cry that the company didn't do anything for them. Meanwhile, along comes a rule that says (a) they can only collect fees from the people that actually manage their money well and get and pay settlements (considering the failure to manage it is usually what caused the mess in the first place!) and b) can't collect from them until after the settlements are done. (when they have absolutely NO incentive to pay anyway.) Im sure others will spin it differently, but the end result is that debt settlement companies just lost 1/2 their potential revenue and all of their short-term cash flow. Whether you're running a hardware store or a debt settlement company, you can't survive as a business under those circumstances.
I agree with DTBF.....I was able to settle my husband's debt wit
I agree with DTBF.....I was able to settle my husband's debt with some help from family. True, I am very very fortunate to have family who can help, but settlement saved me from BK and I was able to be over and done with it as opposed to BK where I had to worry about losing my home, my car (transportation to my work) and having a public record of BK. I also may be able to dig my way out of this mess sooner than BK after my husband's business went belly up!!! Do it yourself people....I'm here to tell you....If I can do it.....you can do it!!!
DebtInsider: I am proud to be a moron that could settle their d
DebtInsider: I am proud to be a moron that could settle their debts and avoid being ripped off. As for your statement of how could you settle $100k of debts with $2000/mo in 90 days -- well neither of us can. If you have read through this forum though you will find a lot of people used 401Ks, money from family and friends and from selling items. But you know that.
But the reality that everyone needs to realize is that if you hire a debt company and you have $100k of debt - they of course want to be paid first instead of after they have actually performed any services. Let's say 15% or $15,000!!! so you are going to pay that $2000 for a little more than 7 months before you even start building an account of money to use for settling. So even if the debtor saved up the money themsevles at $2000/mo they would STILL SETTLE 7 MONTHS EARLIER DOING IT THEMSELVES!!
So no matter how you look at it, your example of someone in $100k of debt at the very least could save $15,000 by doing it themselves. That's a lot of money to people in financial distress.
Insider, You are posting to a forum populated in large part by t
Insider,
You are posting to a forum populated in large part by those going the DIY route. Many people come back and post their success, but you are calling successful posters morons?
You suggest people do research. This site is where many people land who are actively researching their options.
I do agree that there are ample examples of poorly thought out, incomplete or blatantly wrong answers, suggestions and feedback on this forum. Given the volume on this site though, it is a small enough percentage for a public forum.
Definitely,
I would argue that the 50% loss of revenue you mentioned above is in large part representative of consumers who were ill suited for settlement in the first place.
The industry is not dead with these new rules. Many companies will choose to close up, many marketing only companies will certainly close up, many lead generators will move on.
Whats left will be highly scrutinized starting 10/27/10. Those that survive that scrutiny will do well.
My guess is that the industry shrinks by half or more.
To Be,
Your last post makes some great points. Those points will be no less important to consider when companies are charging only fees based on success. Many of the companies that stick around will set fees at 25-35% of savings. Take 50% savings of original balance submitted at the time a consumer enrolls with a settlement company as an aggregate settlement average and you have the same high fees resulting in longer program duration and increased risk of lawsuits that are prevalent now.
One big difference is that consumers will be screened more heavily for suitability. The fee will now have to be based on the difference between the balance of the account at the time it was enrolled into a program and the settlement amount. Added fees and interest cannot be figured into the % of savings fee.
Hopefully companies will not wait 2-3 years to figure out that accepting people into a program they are not well suited to be in could mean working for free, or close to it, in months 24 and beyond.
Mileage may vary