That’s why even trained economists, investors and bankers are also predatorily devoured at times depending on inconvenient chaos, or pure lack of awareness, the illusion is far above nation-state scams now, and is to greatly complicated in the global power complexity which even nation-state governments cannot understand due to illusion, delusion, and the sheer magnitude of the whole.

These things require a deep understanding, and computers employed in that deep intelligence logic, and that’s why America as a example, from top to bottom, as a very tiny percentage of awareness, akin to the ratio of the greatest wealth holders or less, say .01% have even a clue in the masses, that a much huger level of predation is occuring, and the masses are locked in their own box of much “understanding”, which is simply untested theory, programmed delusion, and guesses.

The big wave will devour all these poor people sit up for this sort of ecological purge, quite naturally, and artificially.

You know what I mean? True world devouring disruptive chaosis.

I was forced into retirement with $80,000 debt. No way to pay that. I only recieve SS and state ret. check, but with no payments living best I ever have in life.

Just remember if you are already in trouble your credit is already shot. Any payment plan is not going to fix that. If the do sue GO

One thing I would suggest is getting caller ID. That way, I just didn’t answer any calls from people I did not know. If there were important calls, people would leave a message. The CC companies usually did not, or left tape recorded messages which I easily deleted. It was a welcome relief. Capital One sent my accounts to Collection Agencies very quickly – so we ended up settling with them instead of the card companies, and the 1099s came from them.

For what it’s worth.

LM

How it applies to debt settlement is: when you add up all of your liabilities (credit card debt, neg equity on home, car loan etc) and all of your assets (bank accounts, investments, positive equity on home etc), if you owe for example, 50K more than your assets add up to, then you have a 50K negative net worth and are insolvent by that amount.

If you owe 50K on credit cards and 25K is forgiven, you will not be liable for tax on the 25K that is forgiven because you are insolvent by 50K. So you could have up to 50K of debt forgiven before a tax liability kicked in. (Note- as the debt is forgiven it reduces your liabilities and therefore the total amount that you are insolvent by.)

DISCLAIMER – this is a simplified example and doesn’t take numerous factors into account. I am not a tax attorney and cannot give tax advice. Make sure to consult with a tax professional to determine what, if any tax liability you may have in your specific situation.

The reality is that for most settlement companies the success rate is less than 20%. And a lot of the really bad ones, the success rates can be down in the 1 to 2% range, seriously.

A few months back their was a scam outfit out of Florida, that was shut down. When their books were opened up,it was revealed that only about 400 clients out of about 40,000 actually completed the program. That wasn’t a misprint, only about 1%.

You really need to do your homework before signing up with a settlement program, especially the ones that want all their fees up front. Those usually have the highest dropout rate.

I figured it was either enter a DMP or file for bankruptcy, now I wish I would have filed.
Thanks Again for the articles.

I am not commenting on whether or not 25% of savings is to high or to low. In my opinion it is high, but just to run the numbers. For someone in the right situation to where debt settlement is the best option to avoid BK. Lets say they owe 50K.

What many people forget to tell consumers is that the balances will inflate while saving the money to pay the settlements. So lets say that the 50k goes to 60K.

If they can settle that for 50% or 30K and the company charges 25% of savings, that would be 25% of 30K (7500). So that would be a total payback of $37500 over say 2 years.

To answer whether or not it is worth it, that depends on each individual. Remember if you owe 50K on credit cards, you don’t actually owe 50K. If you are making min payments of $1250, then you actually owe the future value of $1250 payments over however many months it will take you to pay off. So you will probably end up paying more like 100K if you just kept making payments, and it may take you 5 or 10 years (again depending on your payments and your interest rates).

So yes, settlement does make sense for Certain people in Certain situations. In the example above even with a high fee like 25% of savings the client is probably saving more like 62,000 and shaving many years off of the debt. So you can’t look at it like you owed 50K and paid back 37500 so you only saved 12500.

Again not arguing the merits and saying you should settle your debts. But if you don’t have the money to do a debt roll up (snowball) or you can’t afford the payments with consumer credit counseling, and you can’t qualify for Ch. 7 or don’t want to file BK, then settlement is something to look at as a potential option.

Last, there is no rule that you do have to hire a company to do it for you. This is a personal preference, some people just go for it, also there are programs available for much less money that teach consumers to do this themselves. The important thing is to research all options before doing anything.

BTW, if the settlement company takes 25% of the savings, then if you even get 50% off, in the end it’s only 25%. Is it really even worth it to bother with these companies? It seems like everyone wants a piece of the pie of a person who is already drowning. Talk about offering a lifesaver to a drowning man but demanding payment first.