Consumer Law Program
This means negotiating with a creditor to reduce the amount of a delinquent debt down to a lower amount that the debtor can then pay in order to fully satisfy or pay off the debt. The primary benefits of this strategy are to:
- Become Debt Free Sooner
- Pay Your Debts On Terms Structured To Your Specific Budget
- Avoid Bankruptcy Filing
- Pay Less Than You Normally Would By Making Minimum Monthly Payments
- Have Attorney Protection And Services Provided.
- Ultimately obtain successful debt resolution
How The Debt Resolution - Consumer Law Program Works
The Law firm works on consumers' behalf, to lower principal balances due. Savings of 50% or more are often obtained upon consumer completing the program term.
Law firm or attorney will perform the Debt Validation process with each creditor on the consumer's behalf. This is to insure that the credit accounts were legally opened and bound in accordance with federal consumer credit rights and Fair Debt Collection Practices Act (FDCPA).
The firm negotiates with the consumer's creditors while the consumer accumulates funds for the settlement arrangement. It does not make monthly payments to creditors. Typically a percentage of the debt enrolled is collected by the law firm for their services. Their service fee is included in what the client pays back through the structured payment plan. The scheduled monthly payment is deposited into the consumer's FDIC insured savings account each month. Consumer has full access an control of the account while enrolled in the program.
Once a settlement arrangement has been reached, a client service representative from the law firm will contact the consumer for approval and permission to execute a legally structured settlement arrangement. This allows full transparency and keeps everyone on the same page through out the entire process.
More About The Consumer Law Program
This consumer debt resolution plan can resolve your debts in one to four years at significantly lower cost than that of a debt management plan, when you stick with it. It typically provides much better repayment terms than a Chapter 13 Bankruptcy filing as well.
The plan does not leave a permanent bankruptcy judgment on your record either. The program does have a negative impact on credit ratings and profiles. The adverse effect is not permanent and the consumer will have the opportunity to rebuild their credit in the future. Consumers in serious financial hardship are best suited for this program.
Those who cannot afford to make minimum payments on bills and who cannot afford the higher monthly obligation typical debt management programs require. This practice is also known as Debt Arbitration. It is an aggressive approach to debt reduction and resolution. Lenders have been practicing the concept of debt resolution for hundreds of years.
The practice of debt resolution and negotiation became prominent in America during the late 1980s and early 1990s. Due to bank deregulation, which loosened consumer lending practices, followed by an economic recession placed consumers in financial hardships.
With charge-offs increasing, banks established debt resolution departments. The departments were staffed with personnel who were authorized to negotiate with defaulted cardholders to reduce the outstanding balances. They hoped to recover funds that would otherwise be lost if the cardholder filed for Chapter 7 bankruptcy.
Incentives For Creditors
The creditor’s primary incentive is to recover funds that would otherwise be lost if the debtor filed for bankruptcy. The other key incentive is that the creditor can often recover more funds than through other collection methods.
Bad debt purchasers buy portfolios of delinquent debts from creditors who give up on internal collection efforts. These bad debt purchasers only pay between 1 and 7 cents on the dollar. Collection calls and lawsuits often push debtors into bankruptcy, in which case the creditor often recovers no funds at all.
Applicants are subject to final approval. Individual results will vary. Not available in all states.
Have Questions About The Consumer Law Program?
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