Debt Free League

Avoid the Wrong Debt Negotiation Company

Posted by: debtfreeleague1 on: February 1, 2010

As the financial strength of some of the most prestigious banks crumbles, “debt Negotiation” keeps rising in popularity. However, Debt Free League would like to caution that many debt negotiation companies are abusing consumers.  In recent years, there have been numerous complaints against the debt negotiation industry “charging consumers excessive fees” and “failing to reduce consumer’s debts as promised.”

In 2009, Illinois Attorney General Lisa Madigan, whose office over the past few years has received more than 12,000 consumer complaints regarding debt and credit issues, sued Credit Solutions of America (CSA) alleging the debt negotiation company falsely claimed that its services can help to reduce consumers’ credit card debt by 50 percent.

In the Attorney General’s lawsuit, she contends the debt negotiation company “continually failed to negotiate with consumers’ creditors” and that “as a result of CSA’s failure to take any effective debt settlement action on behalf of consumers, creditors frequently sue consumers to collect on the outstanding balances.”

The debt negotiation company also “charged an upfront fee of up to 10% of the consumer’s debt and when they settled one of the consumer’s accounts, then  they charged a settlement fee of 13% of the amount by which they were able to reduce the consumer’s debt.” Ouch!!!  How would these poor consumers manage to get out of debt after paying a ridiculous 23 percent in fees?

Additionally, Madigan filed a lawsuit on Debt Relief USA alleging that despite its promise, the company “failed to negotiate substantial reductions on most consumers’ accounts” although no company can legally make this guarantee.

While recently surfing the web, we came across one of the most absurd guarantees.  It’s the “$25,000 GUARANTEE” offered by Rise Above Debt Relief out of Frisco, Texas.  Incredibly, this debt negotiation company guarantees that people who enroll in their program will save money and receive a total average savings of 30%, or they will pay them “$25,000 in cash!” Now, that’s a crazy, insane offer just on the basis that there’s no guarantee any creditor will agree to negotiate with this company.

Sadly, if you look around, you will see many other companies making similar promises.  But, until the state Attorney General or the Federal Trade Commission step in, these undeliverable promises and guarantees won’t stop!

Thankfully, action is under way…

The Federal trade Commission, which has fined numerous debt negotiation companies for “guaranteeing to settle a debtor’s unsecured debt for a specific percentage, recently received a collaborated letter from the attorneys general of 40 states, requesting for the Federal Trade Commission to impose stricter regulations on companies offering debt relief services.  The letter to the FTC involved attorneys general from Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Guam, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia and Wyoming.

In closing, remember that there are both good and bad debt negotiation companies.  But you must know what to look for in weeding out the bad ones.  Legitimate ones do not make debt reduction guarantees.  However, they can realistically have a 50% average settlement track record.  The actual settlement percentages depend on various factors and actions taken by creditors.

Another approach to find a good debt negotiation company is to ask for proof of their actual debt settlements. The company should be able to provide you with a copy of a recent debt settlement letter, preferably a debt settlement letter of one or more creditor accounts that you plan to enroll.

Here’s an example…

At the website of the you can view various debt settlement letter examples on debt settlements that Debt Free League has reached not only with some of the nation’s top creditors, but also with debt collection agencies, and debt collection attorneys. Note:  The actual results will vary depending on a number of factors.

Many companies outsource debt negotiation.  But a legitimate debt negotiation company can provide proof of actual settlements via an authentic debt settlement letter bearing their name.   If a so called “debt negotiation company” does not have experienced debt negotiators, you should think twice about enrolling with them.

What Paying Lower Debt Negotiation Fees Means

Posted by: debtfreeleague1 on: November 1, 2009

Although  debt negotiation can effectively help people that are drowning in debt to avoid bankruptcy, finding the right debt negotiation service requires a lot of caution. Over the years, far too many complaints have been filed against abusive debt negotiation companies due to “charging consumers excessive fees” and “failing to reduce consumer’s debts as promised.”

Due to the abuses, Illinois Attorney General, Lisa Madigan recently filed a lawsuit on Debt Relief USA.  Madigan alleges that despite its promise, the company “failed to negotiate substantial reductions on most consumers’ accounts” although no company can legally make this guarantee.

The company  also “charged an upfront fee of up to 10% of the consumer’s debt and when they settled one of the consumer’s accounts, they charged a settlement fee of 13% of the amount by which they were able to reduce the consumer’s debt.”

In finding a fair and ethical debt negotiation service, AVOID a company that promises or guarantees to get any type of debt settlement results.  Instead, look for a company that has a good track record in negotiating settlements.  Lastly, look for a company that doesn’t charge exorbitant fees.  Most that do, bury their fee in fine print.  So, be very careful.  A trustworthy debt negotiation company will openly talk about their fees.  The following illustrates the importance of paying less in fees:

Debt Free League charges its clients a debt negotiation fee that equals only 10 percent of the consumer’s total enrolled debt.  The fee that is one third less than the debt negotiation industry average.  Most debt negotiation companies charge 15 percent or more.  The low fee allows client to save more. It also allows you to dedicate more money to your settlement funds, thereby shortening the term to become debt-free.  The low fee has also allowed many Debt Free League clients to reach their first debt settlement between the 5th and 7th month of their enrollment.  Because of high fees, typically, debt negotiation clients can take 9-12 months before seeing their first settlement.

The Bankruptcy Alternative for Business Debt Reduction

Posted by: debtfreeleague1 on: September 1, 2009

Each month there about 40,000 business failures.  Many of these small businesses were buried in business debt and were unable to find the right business bankruptcy alternative.  A common mistake in business failures is trying to consolidate business debt with a home equity debt consolidation loan.   The risky move involves pledging business or personal collateral to guarantee the loan repayment.  Another grave mistake is joining a credit counseling program, which does not provide business debt reduction.

However, when business financial disaster strikes, hiring a professional debt negotiator can be a smart way to prevent disruptions in your daily business cycle.  The business debt settlement benefits of the Debt-to-Freedom Plan can help you convert overdue business credit card accounts and delinquent vendor invoices into favorable out-of-court settlements.  They also help negotiate business leases, business contracts, commercial lease disputes, equipment leases, and even vendor lawsuits and judgments.

Debt Cures They Don’t Want You to Know?

Posted by: debtfreeleague1 on: March 9, 2009

Debt Cures They Don’t Want You to Know:

Right Debt Relief Prescription, or Just Marginal Advice?

Some people who are in serious debt sometimes make the fatal mistake of relying on irresponsible self-help books to get debt cures. One of these books is Debt Cures They Don’t Want You to Know by Kevin Trudeau.

Lately, millions of people have been exposed to the above book through the persuasive author’s TV infomercials professing “you can fight back the financial industry and apply his solutions to your debt problems, and put more money in your pockets.” However, the only money going into anybody’s pocket seems to be the profits streaming into Kevin Trudeau’s coffers from the book sales he makes amongst other things.

If you’re in debt, the infomercial will entice you to call a toll-free number or go online to order the $19.95 self-help book, plus $11.95 shipping and processing fee.  Also, if you don’t want to wait 2-3 weeks, to have the book shipped in 3-5 days, be prepared to pay a $9.95 rush delivery fee.

If you order the book online, after entering your credit card information, you’ll be offered to add to your shopping cart, a “Savings2Go” coupon program that includes discounted purchases from retailers like Home Depot and Sears. Of course, it’s an additional cost, $14.95 a month!

Then there’s a “Fast Track to Free Money” book with information on grants.  And a “Debt Kit Deluxe” suite of credit repair letters to send to creditors and credit bureaus to help you repair your credit.  But what does most of the above have to do with self-help information to a debt cure? Sounds more like a commercial ploy to sucker distressed debtors who don’t know any better to get into MORE debt!

It also appears that the “#1 New York Times Best Selling Author” should have more appropriately entitled the book, “Debt Schemes That They Don’t Want You to Know.” Although the 316-page book sensationally exposes credit card company schemes, it does little to educate people about some of the most vital debt cures.

Only two pages of the book (208-209) are dedicated to the topic of “debt settlement,” which short of bankruptcy is a super aggressive debt cure for eliminating not only credit card debt, but also medical debt and small business debt. But what do you expect from a guy who also sells books on questionable cancer cures?

Here’s the lesson learned: “AUTHORS SELL BOOKS!”

If you need strong debt relief, instead of looking for a debt cure from a self-help book and getting exactly what you paid for, you should seek help from a debt management professional.  In seeking debt cures, web sources like Wikipedia can provide much better resources than buying a $19.95 debt-help book.

If you seek a potent debt cure, you may want to consider “debt settlement”, which prevails over the debt cures prescribed by consumer credit counseling debt management plans. For a debtor with an extreme financial hardship, the debt settlement debt cure can provide more aggressive debt elimination.  The solution works well on credit card debt, medical debt, and business debt.

For more information on the the debt settlement debt cure, call 1-800-213-9968 or visit www.DebtFreeLeague.com.

Low-Balled by a Debt Settlement Lawyer

Posted by: debtfreeleague1 on: January 27, 2009

Finding a reputable debt settlement company that doesn’t low ball is no easy task in an unstable economy.  Recently, our eyebrows were raised on a consumer who owed around $76,000 in credit card debt, who was grossly misquoted by a debt settlement law firm.

Upon learning the low monthly payment, that the consumer had been quoted, we asked him to fax to us the law firm’s contract and written quote.  Below is our shocking discovery:

1. The law firm’s fees were about $8,000 higher than our fees

2. Their quote included a “Good Faith Down Payment Fee that was slightly over $5,000. which needed to paid in the first four months. Thus, no settlement funds would have accumulated for this client until the fifth month.

3,  The law firm also quoted a 25% fee on the savings reached.

4.  The law firm LOW-BALLED a 40% settlement estimate based on the balance of the enrolled debt.

HERE’S THE PROBLEM:

Debt balances enrolled in a debt settlement program can increase due to accruing interest, late fees, and possible over-the-limit fees. But the law firm failed to adjust for such balance increases in their 40% settlement estimate. Thus, the 36 month program term they quoted may have have easily extended past 40 months due accrued fees and interest charges.  As, a result, he could have ended paying a lot more in fees than what he was originally quoted.

In closing, just because it’s a law firm, it doesn’t mean you should entirely trust what they say.  Do your homework. Shop around.  And if the quote sounds a bit unrealistic, chances are that it is.

Here’s a link to our debt settlement examples: http://www.debtfreeleague.com/settlement_examples.html.

Tips on Debt Collectors and Debt Settlement

Posted by: debtfreeleague1 on: January 6, 2009

Many people with collection accounts are ignorant about the their debts.  Fear of the unknown or just plain ignorance paralyzes debtors into doing nothing to fix their financial problems.  As a result, financial matters spiral out of control.  But if you plan to effectively get out of debt and stay out of it, it is essential to know what caused you to get into debt.

Being burdened by delinquent bills, chances are that you’re also tormented by collection calls. Debt collectors can get very nasty and their ruthless collection tactics are designed to scare you into paying them. However, upon collecting a debt, numerous debt collectors have been known to violate many rules under the Fair Debt Collection Practices Act (FDCPA). Under the FDCPA, you have many protections against abusive debt collection. So, know your rights!

If you’re searching for a good debt settlement company to get out of debt, avoid companies that make undeliverable promises or guarantees. The Federal trade Commission has fined debt settlement companies for “guaranteeing to settle a debtor’s unsecured debt for a specific percentage.”  A debt settlement company cannot guarantee that a creditor will accept partial payment of a legitimate debt.

Although many debt settlement companies estimate their settlement averages at 40% of the total debt, a more conservative estimate is 50% of the balance of an enrolled account. An additional 10% should be estimated to account for potential increases to the balances of the enrolled accounts due to accrued late fees and interest charges.

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NOT as Stringent as Consumer Credit Counseling Programs

Posted by: debtfreeleague1 on: December 20, 2008

Oftentimes, debt settlement programs have less stringent qualification requirements than consumer credit counseling programs. A debtor is able to enroll a variety of unsecured personal, medical, and business debt, and other accounts normally excluded through credit counseling debt consolidation programs.  Debt settlement programs generally accept:

● Credit cards
● Gas and Department store cards
● Finance company accounts
● Bank signature loans
● Medical and dental bills
● Collection accounts
● Post-property foreclosure deficiency balances
● Post-vehicle repossession deficiency balances
● Judgments
● Business debts

For more information on debt settlement, call 1-800-213-9968 or visit DEBTFREELEAGUE.COM.

Get Medical Debt Reduction via Debt Settlement, Not Debt Consolidation

Posted by: debtfreeleague1 on: December 19, 2008

Ironically, medical debt is the principal cause of U.S. bankruptcies.  Based on an American Journal of Medicine study, 62% of all bankruptcies in 2007 were linked to medical expenses.  But, what’s even more surprising is that 80 percent of the bankruptcy filers had health insurance.  Additionally, their average medical expense was slightly under $18,000!

So, why the alarming statistics?  Oftentimes, people that are burdened by medical debt are clueless about finding a practical solution to their problems.  Many attempt to get loans to consolidate their medical bills unaware that they’ve exposed themselves to greater risk.  If they default on a debt consolidation loan, they are risking foreclosure of their properties.

Another common pursuit to achieve medical debt consolidations is credit counseling. But this debt consolidation approach does nothing to to reduce the debt principal.  A better solution may be debt settlement.

Debt settlement can serve as a medical bankruptcy alternative for people that are uninsured or under-insured.  It can provide strong medical debt reduction, reducing the entire balances on medical bills, hospital bills, doctor and dental bills, past due medical accounts, and medical collection accounts.

For more information on medical debt reduction, call 1-800-213-9968 or visit DEBTFREELEAGUE.COM.

Get Business Debt Reduction via Debt Settlement, Not Debt Consolidation

Posted by: debtfreeleague1 on: December 18, 2008

A key difference between debt settlement and debt consolidation through a consumer credit counseling debt management plan (DMP) is that debt settlement can also provide business debt reduction. “What’s particularly unique about our program is that we can help a small business owner avoid the stigma of a bankruptcy”, declares Vincent Cruciani, one of Debt Free League’s head Debt Negotiators. “It’s an honor to help America’s backbone, the small business owner, to negotiate troubling business debts and resolve cash flow problems.”

Via debt settlement, a business owner who is buried in business debt can avoid the time and expense of fighting business lawsuits, and prevent the seizure of business assets.  Plus, the business owner can excel over the debt reduction benefits of consumer credit counseling with far more debt consolidation than interest rate reduction. This is all accomplished by restructuring for business owners an affordable debt repayment plan that allows them to quickly achieve business debt reduction on many types of business debts , such as corporate credit cards, business loans, past-due business accounts, trade disputes, breaches of contract, and lease disputes.

For more information, call 1-800-213-9968 or visit DEBTFREELEAGUE.COM.

The Alternative to Debt Consolidation

Posted by: debtfreeleague1 on: December 16, 2008

FACT:  Credit card debt alone, now to the tune of $1.5 trillion, encompasses 65% of the rising $2.3-trillion consumer debt epidemic!

If you’re one of the 144 million Americans afflicted by credit card debt and you’re enduring a financial hardship, like for most people, debt consolidations through a consumer credit counseling debt management plan (DMP) may be your best choice. But regrettably, the statistics warn that debt consolidations frequently give mediocre relief to 75 percent of all Americans who are only three paychecks away from bankruptcy.

According to a Consumer Reports survey based on the article, “Pushed off the Financial Cliff”, debt consolidation consumer credit counseling debt management plans have a 79% dropout rate!  But, Debt Free League can go the extra mile to help you settle your debt with a solution that can slash the debt interest rate and  principal.

Debt consolidation through consumer credit counseling debt management plans can take 4-6 years and cause you to repay 1½ to two times the original debt.  But, debt settlement has allowed people to become debt-free in 12-36 months, with savings of about half of the entire debt.

For more information on debt settlement, call 1-800-213-9968 or visit DEBTFREELEAGUE.COM.

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