When a Good Plan Goes Bad

Yes, folks the sound that you hear on the radio and television regarding getting out of debt does come across as the solution to your problems. When contacting a company about debt settlement learn the fine print and make darn sure you don’t become one of the huge percentage of enrolled clients that get frustrated and quit. Debt settlement is a fact of life. It does happen and it does work. The trick is not to put yourself in a program that costs you too much to accomplish your goals. Many debt settlement company programs are loaded down with numerous fees and charges that are included inside the “monthly payment” to the settlement company. It is inside these numbers that I want to educate you on what to look for.

The typical debt settlement contract is sold on a monthly payment. The prospect has his or her debt added up and told that it will take so many months to settle that debt for so much a month. However, the inherent downfall of the consumer looking at the monthly payment is what is missing from the make up of that number. Most debt settlement companies charge a percentage of the consumers overall debt. The typical fee is 15%. So $40,000 in unsecured debt will be charged $6,000.00 in fees. Now, if the consumer had $6,000 cash they would not consider themselves a candidate for settlement, so these fees are put inside this mythical mon thly payment number. Also, most debt settlement companies charge a monthly maintenance fee, also inside the monthly number. The their is the fee for the Trust Account set up for your payments to go into. You get the idea. The consumer is feed to death until they realize this a quit the program. They claim that debt settlement won’t work because they paid into a program for 6 months and nothing was done. They invest many thousands of dollars with no clear results.

The reality is that if you can’t make your monthly payments on your unsecured debt how can it help you to commit to monthly payments, which will be loaded with fees. The answer is it will not help you.

The ideal settlement company will not require you to make monthly payments into a trust account. The ideal debt settlement company will work on your accounts at the same time you are saving what you can, in YOUR account. The ideal settlement company will not care how much debt you have. It doesn’t matter to the ideal debt settlement company because they are not charging you a piece of your enrolled debt as a fee. They are charging you based on what they SAVE you. Yes, what they SAVE you. This type of pay for performance debt settlement is exactly what the FTC and State regulators want to hear. They want consumers to pay for results, not the sales hype.

So, when looking at settlement companies heed my warning above. Just know that this type of debt reduction works, if done with the consumer in mind.

First Cascade Corporation is a debt resolution company that is a low cost approach to helping debtors. First Cascade only charges a small retainer and just 5% of what we save you after the settlement is made. This is a pay for performance based program.