WHEN TO PAY YOUR DEBT NEGOTIATOR. With the debt settlement average being 43 to 45%, the second most important thing is the fee structure. The best way to pay for a company to negotiate your debts is to pay your Debt Negotiator when they settle your debt. Then, you want to pay them a fee that is performance based, meaning the better they do, the more they are paid, but the less you have to pay overall.
Here’s what I mean. If you had a debt that was $1000 and it was settled for $500, that means the bank will take $500 and call it even.
If you are paying the Negotiator a percentage of what he saves you, and that percentage (which is usual for the debt settlement industry) is 25% of what you are saved, then he would make $125 (25% of the $500 the Negotiator saved you).
If you add the $500 to the bank plus the $125 to the Negotiator, that totals $625.
If the Negotiator got a better settlement, let’s say the bank agrees to taking $400 of the $1000 that is owed, then the Negotiator will make 25% of the $600 he saved you, or $150.
Add the $400 that goes to the bank to the $150 to the Negotiator and it totals $550.
THE NEGOTIATOR MAKES MONEY WHEN HE SAVES YOU MONEY
The point here is that the better the Negotiator saves you, the more money he makes, but at the same time, the less money you pay.
That is called a performance based fee and is the type of fee that you want to pay if you are going to go with a Debt Settlement company