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Debt Settlement Video #3

 

1099 C Cancellation of Debt Video #4

 

Taking A Look At Debt Settlement Services

Hi.  I am Las Vegas, Nevada Licensed Debt Adjuster Damian Falcone.  In this Falcon Credit Management video we will discuss another common Debt Management Service that is available to you. Today We will look at Debt Settlement Companies.

This is Get Settled - your source for consumer debt settlement information.  As always, for even more information, go to www.falconcreditmanagement.com.

Like Credit Counseling Agencies, Las Vegas, Nevada Debt Settlement Companies should provide a wide-range of services, educational opportunities, and budgeting and repayment plans. These debt settlement companies should be able to offer different payment arrangements as well as explain how potential options relate to your situation. Loan Modification is provided with a different license.  Unlike Credit Counseling Agencies – Debt Settlement companies often offer an attractive option to attempt to set up a discounted settlement at less than 50% of what you presently owe – this service normally has a maximum time-line of 6-months.  Most Debt Settlement companies receive a large portion of their revenues from commissions you pay based on the money they save you and a minimal up-front fee.

In Nevada the maximum % a consumer can be charged is 30% of the savings not to exceed 15% of the total indebtedness and $50 per debt up front fee.  This means if you have total credit card debt of $10,000 and a Las Vegas Debt Settlement, Las Vegas Debt Consolidation or Las Vegas Debt Management Company negotiates that balance to $2,000 the maximum fee that can be charged up-front is $50 and the maximum commission that can be assessed is 30% of the savings of $8,000 which is $2,400 but since it cannot be more than 15% of the total – In this case commissions are capped at $1,500 – which is still 18.75% not bad.

Another benefit is The ability to be debt free and begin building positive credit in 3 to 6 months.  This is something we cover in more detail in our credit reporting series But it is a question that is frequently overlooked:  How long will it take me to start building positive credit?  A 2-year payment schedule may provide for an attractive payment but for a little bit more money you could be debt free and building positive credit in less than 6 months.  Two years into the future There is real value in a 6 month payment plan and a year and a half of positive credit reporting vs looking back at a 2-year payment plan.

Unfortunately, unlike debt consolidation you will need to be delinquent to qualify for negotiations that result in significant discounts.  It is not impossible to negotiate a current debt but it is highly unlikely that you will experience the same results on a current debt as you would a delinquent debt.

Also there is a seemingly endless supply of poor service providers in this industry.  This will likely improve as the industry ages and develops more of the structure found in fundamental banking industry models.  But with a shortage of Banking professionals making the transition to providing consumer services You have your work cut out for you in finding a few quality debt settlement companies.  We will go into more detail on things that can help you in evaluating different debt settlement companies in a future episode.

So in Summation:

  • Debt Settlement companies:
  • Have incentive to get you good results;
  • They Should provide a selection of services including an option for Being Debt free and building positive credit in 6 months
  • But Unfortunately You will need to be delinquent on your debts;
  • You will likely have no more than 90-days to pay the settlement amount; And
  • You will have to find a company that provides quality services.

In our next episode we will discuss 1099 c Cancellation of Debt or Discharge of Indebtedness or Tax on Forgiven Debts.  Until then, I’m Loss Mitigation Specialist Damian Falcone and this is “Get Settled.”

See our full set of videos on debt settlement.

Credit Service Organization License # 3501
Covered Service Provider License # 3379
8430 West Lake Mead Boulevard, Suite 106
Las Vegas, NV 89128
Telephone: 702-489-6575
Fax: 702-489-6576