Debt Settlement


When closing down one business and moving to the next, you need a clean start.  You don’t want to drag the concrete boots of debt to your new venture.

Debt settlement can be a great solution.  To give you a gauge, credit cards and similar unsecured accounts are generally settled for a 70% reduction.  We can help.  Here’s how it works:


1.   We chat to be sure debt settlement is right for you.  We make sure you’re fully educated and comfortable.  You can call us at (949) 391-6063 or contact us here.


Estimate the Total Amount to Become Debt Free

Total Amount of Credit Card Debt

Estimated Total Including All Costs

You’ll have between 3 and 6 months to find this amount.  You can find it in monthly payments you’re making now, a personal loan at lower rate, savings, stock/mutual funds and selling things.


2.  You send us a copy of your most recent statements and we send you a contract and authorization to act on your behalf (also called a Power of Attorney).  You’ll sign and return via email or fax and pay $150 per account.  You  also send us a short hardship story.  Here’s a calculator where you can estimate the full cost.


3.   We negotiate the debts.  It usually takes between 1 and 3 months.


4.   We reach an agreement and get that agreement in writing.  If we have more than one account we’re working on, these agreements will come at separate times.  We send you an online invoice for 7% of the savings.  You pay it.  We send over the written settlement and instructions on how to pay the lender.  We also send instructions on how to make sure you have proper documentation for the future should any questions arise.


Here are FAQ


Q:  What settlement can I expect?

A:  Credit cards and similar debts like medical bills generally settle for 70% off.  It’s amazing, I know, but a reality.  It takes a lot of time, know-how and finess and it happens.


Q:  Why do banks settle?

A:  They’re not getting paid on the account.  Their only option is harass you or sue you.  They’re happy to harass, but suing costs them money and time.   They will occasionally sue, but in most instances they’d rather settle.  Witha settlement the bank is getting something rather than nothing and that’s very attractive.


Q:  How long do I have to pay off the settlement?

A:  We can generally negotiate it to be paid off in 1 or 2 payments over 1 or 2 months.  The fees (see below) are due when the settlement in reached.


Q:  How does negotiating affect my credit?

A:  On of the necessary elements to negotiate debt is that it’s behind.  Not paying the payments will hurt your credit.  In fact, it will hurt your credit until you start paying again, settle or the bank charges it off.  Settling will actually draw a line in the sand and allow your credit to recover.


Q:  How does negotiating affect my taxes?

A:  Check with your CPA or tax professional.  The forgiven amount may be considered income or you may be able to file an insolvency petition and not have to pay taxes on that amount.


Q:  Will  negotiating work with a foreclosed loan?

A:  It will.  In your state, if you are liable after a foreclosure for either a first or second mortgage, it can be negotiated.  Check your state to see if you are liable.


Q:  Can  negotiating be done in any state?

A:  Yes.


Q:  What is the cost?

A:  You can use our calculator above and see what the estimated negotiated amount to pay off your mortgage would be.  The formula is based on achieving a 70% reduction.  Fees are 7% of the savings + $150 per account.


Q:  How is settlement different from bankruptcy?

A:  I’m a recovered bankruptcy attorney so I can really speak to that question.  Sometimes a Chapter 7 bankruptcy is better.  You can read the blog or listen to the podcast for more specifics.  It’s a federal court proceeding so it’s very involved and you must qualify based on income.  As the economy improves more people are not able to use Chapter 7.  Also, you can keep only a minimum of assets (it varies by state) so check into that as well.  Assets are anything you own including a business, intellectual property, even your wedding ring.


Chapter 13 bankruptcy is a formal court proceeding that lasts from 3-5 years.  In the bankruptcy you pay the court your discretionary income for that time.  In exchange you get a discharge of all debt that’s not fully paid.  It’s a long process with about a 20% success rate and of course, your discretionary income according to the court is always a lot higher than you think it is.  You can do some quick math.   If your monthly payment to the court was $550 for 5 years, you’d pay $30,000 and there are fees and costs of generally about another $5,000.  If you couldn’t complete all the 3-5 years, you’d lose what you paid in.  You can use our calcualtor and see what the estimated negotiated amount to pay off your debt would be and compare the two.


If you’d like to chat with us about your specific situation, call (949) 391-6063 or contact us here.

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