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Debt set. co. told me they could settle my account for 37%


NoMoneyNoHoney
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I got quotes from several debt settlement companies and two showed me figures off of my $10,500 cc debt . They said they could get the creditors to settle for 37% and their fees would be 12%. The approx end breakdown was , I would pay about $5400 debt +fees, and save approx. $5100. This is not bad. They put me on a payment plan of $250 each month for approx 24 months. I could pay off earlier if I wanted to

I havent yet decided to use their service, but I think I will be if I cant get creditors to take my offer. I ask him why they could get such a low amount almost every time. What he told me, made alot of sense. He told me that my account with so and so creditor would be put together with other people who accounts with the same creditor and what they do is go and get a settlement from them offering a big lump sum . Coming to the creditor with a big settlement gives them the leverage to get them to agree to a low % settlement. So everyone seems to benefit from eachother being placed together.

I hear people saying that 60% or even 50% is good to settle with you creditors if you do it on your own. My question is doesn't it seem easier and less stressful to use a company like the one I mentioned who after settling your debt for 37%and fees of 12%= 50% give or take. Doesn't it make sense to use these guys , who by the way some are law firms. to do all this debt settlements. They write all the letters, take all the calls ,. doe all the negotiations. All you need to do is come up with the money.

Am I missing something , cause this seriously seem like a weight and burden that can be taken off my hands for the same amount that I would get , but less the stress and uncertainty. Please give input.

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That problem with debt settlement companies:

1. You have to sign over partial power of attorney

2. You are waiting a long time for the debt to be in the range of settling for that amount of money - like years! While the Settlement company continues to collect a monthly fee from you & profit form making interest off of your money!

3. They will run the route of debt validation - and sometimes their efforts fail - resulting in you being served notice to appear in court.

4. You credit report is totally trashed since that is the very last thing they care about!

5. Then you end up having to pay a percentage difference in what they saved you.

6. Finally If the balance was more then $600 that they saved you - then you know the creditor will be sending you a 1099 - meaning that at the end of the year - it will be taxed against as income you earned!

So if you add all of the ways they are profiting off of you - then you can start to see that this is just a scam to make a lot more money off of you.

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Yes, I would like to hear your theory on this -

I would think that if you are empowered towards debt settlement - that you really ought to save the money and do this yourself and not to trust any one else to this task.

But yes, interested in seeing what you have on this matter.

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By the way , your dog is giving me a headache, lol.

You know I was going to do it myself as found alot of good settlement letters and other letters to use , instructions on when and how. I also am equiped to negotiating cause of my sale exp. and I don't get intimidated easily and I like to argue (wanted to a lawyer) . So far I already did most of the work which they would have charged me for , like the monthly fees . Playing hard to get a hold of, when creditors are calling me. Did this for past 6 months. Something they would have done . Im sending the letters of settlement to some creditors which are far below what they wanted to settle for. But truthfully, I have nothing right now and have been out of work for a year, so what i was promising them , is something that I dont have , but surely go get if they take my offer. Then Cut out the debt settlement comp. I wanted to basically use them to just close the deal and by the end of this year , all of them one time I would cut a check out one time. So I looked for companies that could accommadate me in doing a 3 month deal. Cause i was not going to get caught in their month trap were they get paid to sit on their asses waiting for me to save the money needed to settle the accounts. No next year i want to start fresh.

1. signing the partial power of attorney over is not a big deal for me cause one they cant hurt me any more than I am, and it will be structured and end when by the end of this year , we will be done.

2. I addressed this question up above. I paying for only 2.-3 month at the most.

3.Well, as far as the debt validation, that is not something I was told they would do because. If I use them, I told them that I will pay the 40% for debt and the12%for fees. I will pay them, I wanted this thing settled quickly that is my goal. Everyone will win , if everyone plays ball. So I don't necessarily am worried about them doing that when I agreed to pay them. As far as law suits go , their is I feel more chance of it not happening if I;m using them to settle my debt, they are a law firm and they do come at the creditor with alot of leverage . Plus , in regards to time expense for whom ever wants to sue me , they come all the way out here to Hawaii, to it.

4.As far as my credit report goes, with the settlement agreements if the agree , they will have to list it as Paid in full , or Paid as agreed, and with zero balance. I am making dam sure they agree to do this. I still contemplating if I should just request that the whole debt record be wiped off from the 3 bureaus. I was planning to do this anyway with another law firm I was thinking of aquiring to help repair my credit. What I was getting informed about though , in regards to these bureaus is exactly how they work etc. A law collegue basically informed me that this is when you request the account to verified because it is not yours. They have 30 days to do it and if not by law they must remove it. I found out that the credit bureaus dont get paid for verifying information, so there is no motivation for them to wasted their man power to do this. Also with the ton of request to verify debt, there is simply not enough time. Still, some others said that the collector could put it back on . well it doesn't make sense for the creditor to do this, cause it could make me ineligible, thus they can't attempt to hit me up with another cc offer. Also, if I left it on , and they changed my status,, then the letter will see that he is in breech of our contract and I would threaten to take legal action s if he doesnot delete the entire debt from the records.

5. the percentage of what save me, comes out to 12%label fees. thats not to bad. If did this myself I pocket the 12%.

6.As far as the settled debt being taxed I having to pay, well this why I would like to one get this done by this year, as I did not work and the IRS will be asked to dismiss debt due to hardship and also even without that the setttle debt reported will less than$ 7,000 which means the income is not taxable or that I don't have to file income taxes. Also I set up a small Home Business that I could somehow get business expense deductions to eliminate the income.

Seems like a scam now that you said it, kinda felt like monthly fees were where the scam was , thats why I looked to companies that could give a discount on 3 months. only found one that would,.The other company would make a difference in fees if I went for the 24 month program or paid if off in 3 months. I explained about why it wouldn't be less seeing as i eliminated many months of the loan. You know what, it really didnt bother me cause the amount that I could save , wasn't that great for me to do this myself, so it looked fair to me.. Ex debt of $10,500 40% debt sett. 12% goes to fees. thats it .

OK I 'm done , please I would like to get your open honest opinion on my plans, am I missing something or you would like to share anything , feel free, I await your response.

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First off, correction my picture is not a dog - it is a panda, and I am very found of my panda - so she stays. :-)

I have to admit, that I come from a totally different direction then you on this matter of settlement, personally & professionally. I happen to work for a credit bureau; and even though I don't have problems with debt, I deal with people everyday that do. Beside my knowledge of the CRA & Creditors in general I use to educate people on what can be accomplished when a problem is worked out to the fullest.

But lastly, I have one problem, in that I strongly believe in fairness - not to give a lecture, just to point out my delima with what you ask. I am not an agressive person - and will always fall back first and formost always advise caution and fairness.

Oh don't get me wrong, I understand that there are people with serious debt problems and circumstances that won't cut it on paying back what is owed. I am by no means above advicing from time to time - that people just don't pay. But when they can, I will stress that they do the right thing - and focus more on learning and rebuilding that they are better prepared next time around not to meet the same fate.

You definitely have a good idea of what you are doing, and gumption beyond believe to accomplish what you set out to do - I don't doubt that one bit.

What flaws I do see, is that you are quite confident - and that is a problem should you run up against even just one creditor that does not play by your rules, or better yet, plays harder to win.

Usually my advice when people are hurting and can't afford to pay, is to stay low out of site out of mind. Meaning when you are within SOL - with potential to be sued, let sleeping dogs sleep.

If you feel you have the means to pay back / make a clean slate of it - then all power to you. I will always advise against CCCS or Settlement companies - becuause there sole funtion is to profit off of people in desperate need.

Usually when negotiating settlement, I view the true objective to be removal of the tradeline reporting - even if it means paying more on a settlement to accomplish it.

Then back this up by rebuilding and understanding how the system works, I view accomplishment of good credit not being available credit - but high credit scores for the best possible rates combined with good decisions as to what creditors to do business with and constantly being pro-active all the time for the best rates. This is where I contribute the most here - as well as to helping people with inaccurate reporting, mixed files, split files, and problems resulting from fraud and like I said earlier warning against CCCS and Debt Settlement.

So as you can see, we are quite a bit at cross purposes here,

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I had a feeling it looked more like a fat cat, so sorry. Nah , only joking , but got your attention huh. Just wanted to break the tension , nothing personal PEACE. The things is , I can totally respect a women who stand up for what she believes and is able to carry on a debate. Your very rare, and thats a good thing.

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That was great kb9tbq, you finally opened up a told me or showed me what I already knew about you. That you know the truth about how the system works. All I wanted was for you to tell it like it is. It got me fustrated somewhat , because you persisted to hiding your self. I'm glad now we can talk straight , ok , save us some time if you dont mind. I am really new to this, I am just glad my past experiences and knowledge can somewhat help me out of this situation. If it is ok , and it does not cause a conflict of interest or for you to give up your trades secrets, can I ask you some blunt and direct questions.

Oh ladie moderator, sorry forgot your name, I knew that she was somehow affiliated with the other side. LOL , just joking

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You will find I am a one of my kind here, we do have quite a mix at this board - a few lawyers, a few in the collection industry, we even have a member in with one of the credit card companies.

But yes, my game is educating - ask away.

If you look around, I have a good many articals I have already posted on a many subjects - just pick one and I can either address it or link you to somewhere already addressed. Or point you to the right person with the knowledge to your question.

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As far as law suits go , their is I feel more chance of it not happening if I;m using them to settle my debt, they are a law firm and they do come at the creditor with alot of leverage

ummmmm been here, done that. got the summons anyway. you might not think they can hurt your credit any more than it already is but I'll bet they can! I'm STILL working on getting the dismissed lawsuit off the report.

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Hello Dark, you always know when I am talking about you, your ears must of been ringing yesterday, :-)

So you still have not got your updates completed... did you get them all sent off to on the court documents?

Least you won your battle with Goliath, that is for sure!

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hiya KB! yup my ears were a-ringin'! *grin* I'm still working on removing the court doc from the CRA (still not on DH's) and the closing for the sale of the lot is monday! *extreme snoopy dance* so depending on the check (cert/bank/personal) it should be 5 to 7 working days from then I can settle with everyone and say see ya.....*L* as always.....you're the best!

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yuppers! you've got that right! *L* I can't sleep at night and I can't concentrate at work! *L* good thing I have good bosses and they all just laugh at me and know that by this time next week I should be back to my normal goofy self. this waiting for the check is just as bad as trying to wait for answers to my credit nightmare questions! OMG! I'm still waiting for Christmas too! *L* All I know is "what doesn't kill you....makes you stronger".....at this point I can move mountains! *L*

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