It started with helping a friend
Date: Wed, 06/16/2010 - 19:37
A friend of mine is in massive amounts of debt. She was in a car accident three years ago and the medical bills wiped her out. Then she got into these pay day loans and the entire enchilada. She was in so much debt her phone would ring from 8am to 9pm non-stop. Literally.
She then called me because she started receiving calls from these people claiming to be law enforcement and that she was going to be arrested.
I am a retired police detective. So I looked into the calls and traced them back to an address and then got the name of the company. From there however, law enforcement is lazy. State Police departments, Attorney General's offices, Sheriffs Departments, FTC, FBI, USPIS, ABC, 123. They all send you around and around a Ferris Wheel of "call here"'s. Okay... So I am relegated to "filing complaints" which usually go nowhere. Anyway, my criticism of Law Non-Enforcement aside. I filed all the complaints with the entire alphabet soup and started to do some research.
Well, I called the sheriffs department near where the company was located and asked them to pay the company a visit to speak with the owner and tell the owner to call me (cost me $35 too). Owner of the collections agency calls me the next day and we hash out a deal. I don't put him out of business, he sends me a letter saying the debt is paid in full and disappears and promises to never pretend to be a cop ever again.
Well, then I started handling all of her other debts. I started a company name, got a logo, got a PO box, got a magic jack and use google voice on untraceable accounts, etc etc etc.... I created an entire identity and now claim to be a debt specialist. I was even thinking of getting my PI license in PA. Anyway, I negotiate with debt collectors all day long faxing in authorization letters and settlement letters, etc... Well, I can get debts wiped out for nothing and most of the time settle them for 40% or less.
I kind of like it, and I want to do it full time for others and charge a nominal fee to cover basic expenses and cover my time. I actually want to get some help from others. I feel bad asking for money from people who are legitimately in tough times, but I think I can make a difference and it costs money to run an operation like this.
Where can I go from here and is there anyone interested in helping?
Well the first thing you would need to check into is if you need
Well the first thing you would need to check into is if you need to be licensed by your state to do debt settlement for others for a fee. a lot of states have licensing and bonding requirements before you can charge for your services. good luck in your venture!
Well, I would have to create a legal business and get a licenses
Well, I would have to create a legal business and get a licenses to do business in the State, County and Township that I'm based in. I couldn't find anything in PA to be "licensed" for Debt Settlement. As far as I found there are only 5 states that require that type of license.
Then, finding out what to charge. I most certainly do not want to look like the fly by night frauds. So no flashy website and pyramid scheme for me. I'm thinking a free phone consultation. Then a $45 retainer when you sign the authorization forms, so the debt collectors will talk to me.
Then I would need a solicitor (lawyer), but I just need random advice and the name. Sending a Cease & Desist all contact order will sometimes spark a lawsuit. But if I have a lawyer, I can send them a letter telling them that the person has retained an attorney and that they can only contact my office about the debt. Which may be of benefit in legitimate loans. The stupid unlicensed payday loan people I'll just send a C&D and then file every complaint in the book at them. But any lawyer would charge me a fee too. So I would need to pass that on. But I would want to keep overhead as low as humanly possible so I can charge less. I'm thinking a flat fee to cover the costs of paper, phones, printers, internet, etc.. plus my rate of $45/hr and then if I need a solicitor, whatever he/she may charge.
Does that seem too high?
Mike, I think that sounds very good. I am in the early stages of
Mike,
I think that sounds very good.
I am in the early stages of trying to do it solo but the reason I decided to do that was I found this forum and also I was appalled at how much the settlement companies charged. It just seemed so wrong so if someone wants to do it, make a little profit but not gauge people then I would say you will thrive.
Good luck!
Kaylee
Kaylee, I wholly agree. These companies that claim they care, on
Kaylee, I wholly agree. These companies that claim they care, only care about one thing: Money. It is definitely appalling, to see people take advantage of people who need real help.
I'm not worried about making a living. My wife works and makes a very reasonable amount of money and I was awarded a significant settlement from being permanently disabled in the line of duty.
However, I would like to make enough to buy stuff like the latest iPhone, upgrading the home theater, etc... Little things that I don't want to budget for. I also most certainly do not want to work more than 30 hours a week. I'm retired.
And I quote " Owner of the collections agency calls me the next
And I quote " Owner of the collections agency calls me the next day and we hash out a deal. I don't put him out of business, he sends me a letter saying the debt is paid in full and disappears and promises to never pretend to be a cop ever again. :D:D:D
And "I kind of like it, and I want to do it full time for others and charge a nominal fee to cover basic expenses and cover my time."
Greetings Mike,
Seems that you came out of a profession that helped people (get the bad guy), it's only natural that you pick up where you left off.
It's methodical work and I can see from your posts that you enjoy it very much.
Especially chasing down the debt collector that pretended to be a cop.
What a container of excrement.
I really don't have much to add but spend some time with a lawyer and discover any potential landmines ahead.
Good Luck!
And please keep us posted on your progress.
King "Kash" Jabba Labba
Mike, Depending on your perspective this is either the worse ti
Mike,
Depending on your perspective this is either the worse time to be starting a venture into offering debt relief services, or the best time to enter the business.
The FTC will publish rules this summer that will dramatically increase consumer protections in this area and there are bills at the federal level that will do same if they are passed. You will definitely want to familiarize yourself with what is coming down the regulatory pipeline.
From the perspective you shared in this thread, I would place you in the "best time to enter" category.
You should be prepared to charge a success based fee only.
Best of luck!
Mileage may vary
King Jabba Labba & Someone Else: Thanks for the kind words of su
King Jabba Labba & Someone Else: Thanks for the kind words of support. It is much appreciated.
I agree it is the best time to get into the business. I have seen the drafts of the new laws that are about to be passed and it seems that my prospective business plan would fit nicely even with the stricter guidelines. I will seek licensure as soon as PA requires it, and have already requested PA Dept of State's BPOA to give me a blessing before licensure requirements are made.
As far as a success based fee, I probably couldn't do that 100% because of costs. Notary fees, lawyer fees, phone & fax fees plus the costs of paper need to be covered no matter what. However, those are negligible . I found a notary that will only charge me $1.00 per page that I need notarized. Still looking for a lawyer that can act as a solicitor for a small fee, like $35 per case, since I'm doing all the work.
As far as my hourly reimbursement, that I can do on success base. I'm thinking $45/hr, because its not much work and terms of long hours. A single debt would only take 2 hours max. But, I can do say $10/hr as a retainer, plus the remaining $35/hr after I succeed to resolve the debt. Or a gradient scale. $10/hr flat plus a performance fee of $5/hr per 3% percent I knock down the bill up to a maximum of $45/hr total or something.
It's a work in progress, but your suggestions are much appreciated. Keep them coming!
Regards,
Mike