The process of negotiating debts is a very, very old activity.  You can think back to the times where the Native Americans negotiated land and so forth with furs, beads and other such things.  Even recently in Europe, the debt load of the US was negotiated so that the interest was less which somehow increased the value of the dollar.  

The point here is that negotiating debt has been around for as long as man. 


In the Debt Negotiation (Debt Settlement, same thing) industry, the average settlement is 43 to 45%, period.  There is no one that does better than that.  I’ve been in the debt negotiation business for 10 years and it has always been 43 to 45%.  My business mentor has been negotiating debt for 20 years and the settlement amounts have always been 43 to 45%. 

So, first off, don’t listen to some sales guy tell you that they will do 30 or 35% across the boards.  That just isn’t going to happen unless the person has 1 account and it’s a Chase account. 


Next, on the Fees paid to the Debt Negotiation Company: My advice, don’t pay all of your fees to the company over 6 to 18 months.  

What I have seen many times is that a Debt Negotiation company will have you pay them their fees each month, whether or not they have settled any account.  

They do this by having you pay their fee each month on a decreasing basis until you have fully paid their fees.  For instance, if you pay $600 a month to the company to get out of debt, they will take their fees out of that $600, starting in the first 3 months at the full $600 amount, then graduate it down so each month the amount that goes to them is less and less until it is all paid off.  So, on your payment of $600 for the 4th month, they might have $350 come to them and $250 get set aside for settlements with your creditor.  After the Debt Negotiation Company’s fees are fully paid, all of your $600 will go towards settlements. 

If that is understandable, here is the problem.  If a contractor came to your house to remodel your kitchen, you would NEVER just write him a check that fully paid for his quote. 

You would give him some money and as he finished different parts of the kitchen, you would pay him more.  This would continue until he had the whole project finished. 

You would NEVER pay the contractor in full before he started the project for 2 reasons: 

  1. He loses his incentive.
  2. You lose your leverage

You want him to work for you and give you the best job.  If you don’t like what he has done, you can hold back his payment until he gets it right. 

Why would you want to pay a Debt Negotiation Company all of their fees over several months when they haven’t gotten you completely out of debt? 

If you do that, you lose your leverage and they lose their incentive no matter what they tell you before you sign up.  It’s just a natural law. 


Make sure you pay the company’s settlement fees WHEN THEY MAKE THE SETTLEMENT AND YOU APPROVE THE SETTLEMENT. 

That puts you in the driver’s seat and they are working for you!  

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