Debt Relief Options
Our specialty is educating consumers on the options available for those facing financial hardships. Most programs are designed for those in need of payment relief, struggling with excessively high interest rates or caught in the never ending cycle of minimum payments and never ending revolving debt.
There are an infinite number of reasons that can cause legitimate financial hardships but regardless of the circumstances, our counselors are here to help. Remember, it costs nothing to explore the options..
Debt Resolution and Structured Settlement Programs
Debt Resolution programs, sometimes referred to as debt settlement programs, are the most efficient and least costly way to resolve unsecured debt for those who qualify. Depending on your creditors and interest rates a resolution program could reduce your monthly payment by as much as 40% and resolve your debt in less than 4 years! For clients who can afford a payment equal to their current minimum payments you may be able to complete a resolution program in as little as 24 months!
Debt resolution programs, depending on your state of residence, are offered either by an attorney licensed to practice in your state or in certain states these services can be provided by non-attorney negotiation firms. Regardless of the service provider, Financial Solutions Center advises our clients to only consider programs where service fees are earned on a contingency basis meaning the client pays no fee for service until a successful resolution has been obtained.
In debt resolution programs, a consumer makes monthly payments each month not to the creditors but rather to an FDIC insured bank account referred to as a custodial account. A custodial account is simply a bank account where the client’s monthly payments accrue during the negotiation process and the servicer has access to verify the balances. The account is opened in the client’s name and the client maintains total control and ownership of the funds being held in the account at all times.
The process itself has many steps but basically the attorney or servicer will negotiate the terms with the creditor, notify the client of the settlement offer and when accepted and approved by the client, the payment is made to the creditor from the funds accrued in the custodial account. Larger balance accounts can also be settled with payment terms allowing for accounts to be settled even in advance of the funds being available for payment.
Settlement companies are generally are able to negotiate settlements with the creditor for between 35% - 50% of the existing balance. Although each creditor and client's situations are unique, debt settlement companies and attorney’s practicing in this area of law have extensive experience and are generally able to very accurately estimate the expected costs of resolution and can often come to a settlement agreement much quicker and with a much more favorable rate than a debtor acting on their own.
A quick look at any credit card statement shows that if you are only making the minimum payments it can take 30 years or more to pay off the balance and by the time you’re paid off you may have paid twice or even three times the amount of credit originally used...
For example, the Federal Reserve estimates that if you owe $50,000 in credit card debt at 12.9% interest rate and make only the minimum payments it will take you 41 YEARS and you will back a total of $107,389 by the time you are done. An online payoff estimator is available here:
By comparison, a resolution program can both reduce your monthly payment and shorten the term to 4 years or less if you qualify. A proper review for this type of program is critical as not all creditors can be enrolled or will be successful in a resolution program. Equally, if not more important, a client must fully understand all the positive and negative aspects of a debt resolution program prior to enrollment.
As a non-profit organization, there is never a fee or commitment required for your personalized, comprehensive review to evaluate all the options.