Debt Settlement Case Study:
Here is a typical example of a credit profile of a family contemplating Debt Settlement.
Debt Resolution Plan:
If enrolled in a debt settlement plan, the family above would have one monthly consolidated payment of :
approximately $486 per month for 48 months.
This would save them $729 per month, or $8748 per year.
*if they send in on average $200 extra per month the term would be reduced to 34 months
**if they send in their current monthly expenditure of $1215 every month then their debt would be paid off in just 18 months.
If the clients sign up for this program they will immediately stop making payments to all the creditors listed above, and start making just one payment per month of $486 to the debt settlement firm. The debt settlement company will then reach out to the creditors to explain the situation and start negotiating new re-payment terms. Because this process can take a few months (during which time the accounts are not being paid ), the creditors will start temporarily reporting the payments as past due. This should stop however once the new agreements are in place.
