Debt Settlement Reform

And the trend continues….
In the coming months, we will likely see more regulation for debt settlement companies.  You can be sure that those companies speaking the loudest against the regulations are most certainly the most egregious debt settlement companies scamming the consumer.
Here are a few articles..

How the Financial Reform Bill Could Affect Debt Settlement

Senator Charles Schumer (D-NY), who previously spearheaded changes in credit card disclosures, is again trying to crack down on abuses in the credit industry. Recently, he introduced The Debt Settlement Consumer Protection Act as an amendment to S. 3217: Restoring American Financial Stability Act of 2010, a.k.a. the “financial reform bill.”
Some predict this legislation could be voted on very soon. We’ll be watching.
The DSCPA would regulate the debt settlement (or “debt negotiation”) industry in two key ways:……to read more click HERE

Debt settlement companies face new rules in Indiana

In a piece for legal information website Lexology.com, law firm Loeb & Loeb LLP said that starting on July 1, debt settlement companies will have to get a $25,000 surety bond. They will also have to present a copy of the bond to the state’s attorney general’s office while making disclosures to consumers in the Hoosier State……….to read more click HERE

Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

A Debt Settlement Miracle – Part 2

If you are new to the blog, click HERE to start at the beginning of my story.
POST #31?
Per my conversation with Billy, I called on March 2nd to speak with his manager, Bucky.
While on hold to talk with Bucky, I knew this was the final moment. My last move. Everything I had done for the last 10 weeks had lead to this.
When Bucky got on the phone, I took a deep breath and for the umpteenth time told my story. He listened. Asked all the same questions Billy had asked. I kept my story straight. Explained where the money was coming from and why this was my best offer.
Bucky was very considerate and calm during the call and seemed to really hear what I was saying. He said he would talk to the VP who gets out of a meeting in 2 hours. I thanked him for his time and consideration on behalf of myself and my family. Every time I said those words, I really did get choked up. Even though the debt settlement process does require some manipulation and hard-nosed negotiation, there was a simple truth behind all of this:

I was doing all of this for my family.

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And that was it….my last effort. If Bucky declined my offer, there would be no other option than to scrounge up another $1300 and settle for $9800. Not sure where the dough would come from.
And then…..four hours later my phone rang.
Was this the call? Was this the “DAY”?
It was Billy. I could tell from his tone of voice that he had good news.

” I am happy to say that your offer has been accepted.

Did you hear me?

They said yes!”

I was ecstatic, a bit speechless. I thanked him for his tenacity and sympathy. We both acknowledged that in the past 2 days I accomplished more than I had in the last 2 months. True to form, Billy offered an honest piece of insight. He said he likes working in Recovery because he can really help people.
He really helped me. His willingness to let me speak to his supervisors and managers allowed me to get the deal I needed. Unlike so many reps, he got out of the way. Yes, he was patient and attentive, but his most important role was to NOT interfere with my personal momentum.
He kept me on the phone as we prepped the letter, then faxed it to me. When we got off the phone, I screamed for joy as loud as I could. I ran in to tell my wife! It was a beautiful embrace. We looked into each other’s eyes and she said, “You did it, baby!”
Nope, we did it.
If not for the love of my family, I never would have spent the hundreds of hours of time and energy to go through this debt settlement process.
Here are the final stats:

  • $141,655.56 worth of debt settled for $40,449.11.

  • 28% or 28 cents on the dollar.

This is the end of my deb settlement story, but not the end of my financial recovery story. There are still 3 things I need to do:

  • Loan mod on my 1st mortgage.

  • Settle or loan mod my 2nd mortgage.

  • Build personal wealth and financial security.

More to come…….
Stay tuned and stay afloat. Wealth and freedom are in your future.
Jonathan

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A Debt Settlement Miracle – Part 1

If you are new to the blog, click HERE to start at the beginning of my story.
POST #30?

Mafia spaghetti with seafood and tomato sauce

How do we create an airtight counter offer?  An offer they can’t refuse….not because of the threat of a bloody horse head or anything “silly” like that. More like an offer where the numbers make so much sense that they are realistically un-movable.
Here’s where we stood:

  • Their offer:            $9808

  • My current offer:  $7500

  • My goal:                $8600

After several conversations with my CRN coach, we came up with the silver bullet.
My current offer was $7500. If I deferred March’s car payment of $514, that would bring us to $8014 – payable today.  Then I make an additional payment 30 days from now by deferring my April car payment of $514. Total offer: $8528. I can’t go beyond that amount because:

  • I have already borrowed from EVERYONE I could.

  • I have deferred as many other bills as possible.

  • I can’t defer my mortgage because that would jeopardize the loan mod process.

  • If it weren’t for the loan mod potential, I would just declare bankruptcy and fore-go all of this effort.

NYC - Queens - LIC: 5 Pointz - Roadrunner and ...

There were so many aspects about this offer that made it genius – in fact it was super genius.
I can say this without bragging because I didn’t come up with it –  my CRN coach did. Obviously not her first rodeo. It was exactly this type of creative bargaining that can make or break a deal.
I called Billy in Recovery and made this counter offer. He was impressed by our creativity and resolve, though not AT ALL confident.
He went to the sup and very quickly came back with the same $9808.00 offer from yesterday.
I thanked him for his time and reiterated my intention for doing all of this was 3 fold:

  • To shield my family from anymore hardships.

  • Hold on to my house.

  • Offer a good faith settlement to the bank.

He was again sympathetic.  I asked him to bypass his sup and PLEASE talk to his manager. He agreed.
Two hours later, he called me back to say the manager had denied my offer.
It seemed like I had played my last card. What was left to do?
Then it hit me:

  • Maybe Billy’s compassion for me was a direct result of how I was telling the story.

  • Maybe if I spoke directly with the manager he would “get it” too?

Lucky for me, Billy agreed to make that happen.
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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A VISA Debt Settlement Offer

If you are new to the blog, click HERE to start at the beginning of my story.
POST #29
This is the day!!!!
Famous last words…..well it wasn’t THE day, but it was a BIG step forward.
I got on the phone with my contact in Recovery, let’s call him Billy. I had done my dance of the purgatory fairies the night before. Apparently they heard me because my account was in his system.
Billy was a down home kinda guy. A slow, calm droll to his voice – focused, smart and confident, but no attitude.  Quite frankly, I felt lucky to have found him. He seemed to understand my plight and was willing to work with me. Usually, I don’t believe in bonding with your “salesman” but with Billy it was different.  He was authentic, so I trusted my gut and trusted him.
He reiterated that $7500 was extremely unlikely. He had seen offers of 40% ($11,200), but only in extreme circumstances.  From his experience, my account was likely to be in his department for about a month and it would take that much time to get the supervisor to consider a deal that even came close to my offer of $7500.  That said, he was a man of his word and agreed to send it up the flag pole.
He put me on hold for less than 2 minutes, came back on and said he couldn”™t reach any sups but would try a manager.
In what seemed like 10 seconds, Billy came back on the phone.  He wasn’t the excitable type, but there was a smile in his voice.
Apparently, he had never seen an offer this low and this quick.
$9809.87 or 35%

We were in business!!!!!!

I calmly thanked him, showed my appreciation, but said this was still $2300 over my offer and I had to consult with my credit counselor (CRN coach).

Giant House of Cards
Image by Tjflex2 via Flickr

At this point, it was critical that my story stay consistent. In reality, I had access to about $8600, but our financial story had been a complicated one of borrowing (true), and deferring payments (true). We had allowed ourselves a little bit of wiggle room without telling the bank.  Now that we were going to counter offer above our most recent offer of $7500, we had to mathematically explain how and why it would happen. If there was a hole in the story, it could all fall apart like a house of cards.  The domino effect of which could make my real house fall like a house of cards. Not good.
Luckily, Billy added a little piece of magic to their offer. Unlike so many scoundrels in the collections and recovery departments, he took the pressure OFF of me.
“No one is putting pressure on you to decide today. The offer is good for 2 weeks.”
This is really unheard of!
So close…..but not quite there.
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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Trying To Avoid Charge Off

If you are new to the blog, click HERE to start at the beginning of my story.
POST #28?
I was content to let my account charge off at the end of February and go to the Recovery Department until my CRN coach tried to talk me out of it.
There was a complication that she wanted to avoid. Very soon, I was going to apply for a loan mod on my house (yes my story continues!). She thought it might be risky to play chicken with the bank this one last time. There were for 2 reasons:

thunderbirds
Image by Blondie5000 via Flickr
  • If I got sued by my VISA account, it would destroy my chances at a loan mod.

  • My mortgage bank would be less likely to grant a loan mod if I had outstanding unsecured debt.

With the loan mod on deck, her advice was to not screw around. Let’s land this last deal and move on.
I trusted CRN implicitly so I went along with the advice. I called the VISA department 6 times between 2/25-2/28 in an effort to settle. My CRN rep even decided to step in and make the calls for me. This would end up costing me a bit more money if she landed the deal, but it would be worth it.
We called on Friday, Saturday, Sunday – multiple times each day. We re-told the story over and over. We spoke with call centers in Iowa and Oregon. We weathered threats of judgments and law suits.

PEARL HARBOR, Hawaii (May 4, 2007) - Chief Min...
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Unfortunately, nothing worked. The VISA collections department was firm. And when I say firm, I mean” firm like the buttocks of a body builder” firm.
THEY DID NOT BUDGE.
After our last ditch effort failed on Sunday 2/28, we resolved ourselves to charge off. But not all was lost.
On Sunday evening 2/28 we called the Recovery Department. Apparently, the account would be there on Monday morning. We wanted to get a head start so we called them. We told the rep that our prior offers were for $5000, but I put my ego aside and asked one more friend to loan me $2500. This would make our total offer $7500. The rep was impressed with my tenacity. He was sympathetic, smart and straight forward. He listened.
From his point of view it was a long shot – a BIG long shot. But he read through my notes and could tell I was sincere and up front. As long as the account hit his system in the morning, he agreed to bring it to his supervisor first thing.
We could only pray that the account would appear in his computer the next day and NOT end up in purgatory.
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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Debt Settlement Purgatory – Part 2

If you are new to the blog, click HERE to start at the beginning of my story.
POST #24
Still in purgatory……

200m
Image by MightyBoyBrian via Flickr

I made another pro-active call to the Recovery Department and this time I got a different answer.
They said the acct wouldn”™t reach their dept until I stopped making payments on my settlement with the collections department.

WHAT???????

I clarified that I had NOT accepted their settlement offer of 60%, per my discussion with collections on 12/16.  I reiterated that I could borrow $20k from a family friend to settle both accts.
“Let me see what I can do” The rep seemed eager and put me on hold.
At that moment, I was very hopeful.  My offer was going to the manager who would be yet another person in the recovery department aware of me and my case. I found that familiarity is a big factor in the success of debt settlement.  Unfortunately, the manager said we had to wait.
But this call still had merit. The rep promised to make sure collections corrected my account to reflect that I had not accepted a settlement yet.
It’s a good thing I caught this.  Had I not, this would have delayed my account further.
I waited another 2 days and called the recovery department again. It was 12/24, the day before Christmas. Just a month ago, my call the day before Thanksgiving resulted in a great settlement. Perhaps the timing of this call would have the same effect.

…..and it did!!

The rep asked me if I was waiting for the account to charge off. I confidently said I was not waiting for anything. The notes on my account should reflect that I am actively trying to make a good faith payment to you ASAP.  This rep said this:

  • Your account is in the process of charge off.

  • It should happen by Monday, 12/28.

  • Call me after 10AM PST Monday at my direct line.

  • I will gather info, talk to sups and be ready to handle this.

BOOOOO-YAAAAA!
I finally had a hard date. I found a person who wanted to work with me. He gave me a day and time to specifically call him to settle this account. It was Christmas eve.  It felt like I had been given a great Christmas present.
With a little patience, I would be a new man.

Xmas tree
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Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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Debt Settlement Purgatory – Part 1

If you are new to the blog, click HERE to start at the beginning of my story.
POST #23

Lost title card
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What is debt settlement purgatory?  It’s kind of like the sideways time line in the final season of “Lost“.  Confusing, frustrating, but does ultimately lead to nirvana. My account had left the Collections Department, but wasn’t yet in the Recovery Department.
Apparently, there is a dead time after collections but before recovery. The account is technically charged off, but doesn’t appear in any particular department. It’s like when you send an email and it leaves your sent box but never hits your outbox.  You know that just a moment ago it DID exist, but due to technology, you can’t find it. Well, this was a nut to crack. I had come this far and wasn’t going to let the critical last 2 weeks of the year get away from me.
Someone would have the answer. Someone would be able to wrangle my account. I just hadn’t found that person yet.  Where was my Jacob?  But remember what I had said at the beginning of the journey:

TENACITY AND HARD WORK

So I put my nose to the grindstone and called, and called, and called again. I kept telling my story over and over to rep after rep. I kept getting the same answers over and over again, “I am sorry Mr. Grossman, your account is not in my dept. It is on its way to the recovery dept, but won’t show up on their system for another day or so.”
According to the Recovery Department, the absolute latest it would hit them was 1/1/10. But that would be the beginning of a new month and a new fiscal year and this would likely hurt my negotiation.
It went on and on like this for 10 days. I had prepared myself for the big day of settling these 2 enormous accounts.  Settling $100,000 seemed almost within my grasp. I could taste the relief. Each day I woke up, I said to myself, “This is the day!”  I would get all amped up and prepared, then make the call only to find that I had to wait another day.  Time was getting thin.
It was December 22 – dangerously close to December 31st, the end of the year.
How would I get “unLost”?
Stay tuned…..
Jonathan

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Debt Settlement Weapon of Choice – Consumer Recovery Network

If you are new to the blog, click HERE to start at the beginning of my story.
POST #21
I have shared with you, again and again, that debt settlement is a process. It forced me to do a lot of research, tested my patience and resolve and challenged my brain. But I want to make one thing clear, I am not an expert. I am a FIRC (former irresponsible recovering consumer) who successfully followed the coaching and guidelines of the Consumer Recovery Network DIY program.
Several times I have looked back on this experience and wondered if I could have done it all on my own without the help of a DIY program.  There is a lot of free info on the internet. Heck, this blog itself shows you many of the techniques used to navigate the process.  After careful review, I have concluded that you CAN do it without the help of a company…..but I don’t recommend it.
Here are a few pitfalls of going solo:

Ozzfest 2007: Zakk's Solo 3
Image by LuvataciousSkull via Flickr
  • Every situation and bank negotiation is different. You will have to improvise along the way. A wrong choice can kill the deal.

  • Timing is everything. Not all banks process the collections in the same time line. You will be doing some guessing.

  • The reps will lie to you. How will you sift through the BS?

I followed CRN’s DIY program. I listened to the CDs, read the workbook and had about 30 hours of phone calls with my CRN coach. Guess which was the most indispensable aspect?

The advice from my coach.

There were a zillion forks in the road during my debt settlement. All of the solutions came from discussions with my coach. I have shared many of these solutions already, but I want to add one last thing.
I knew was getting close to a settlement on these 2 big line of credit accounts. It would take a bit of fancy footwork, negotiating and quick thinking. There was critical phone call I had to make and decided to add an extra safety measure. This technique, appropriately called the Debt Settlement Weapon of Choice, can only be done when you have a coach. Hang on, this is a good one!
I called my CRN coach, put her on mute, then conferenced in the bank.  While I was talking with the bank, my CRN coach was listening in and emailing me questions to ask the bank rep. GENIUS!
We only did this once, during a critical call. It was a great help because, despite all of my preparedness, the flow of this particular conversation was beyond my expertise. I couldn’t distill the truth from the BS, nor could I determine the best questions to ask.
In short, you can do a full on “free” DIY by using info on the internet.  But for me, I concluded it was best to have an expert coach offering advice and counsel specific to my situation.  Especially when that advice was in real time during the conversation, via email!!!
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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Debt Settlement Insider Info

If you are new to the blog, click HERE to start at the beginning of my story.
POST #20
I was flying high from my first settlement.  It was an amazing feeling to say the least. However, I still had my work cut out for me. Even though I had tons of information and momentum, I still had 3 accounts totaling over $100,000 to deal with. In the scheme of things, the party was just getting started.
I did have a few things going for me though:

  • I knew the best deals were had in the recovery department.

  • I could use my first settlement of 35% as bargaining power when reps said that the bank never settles for less that 50%.

At the advice of my CRN rep, I made a bold pro-active move.  Two of my line of credit accounts were set to charge off on 12/24/09. Even though it this was 3 weeks away, she suggested that I call the Recovery Department and start the conversation with them. Wow was this an interesting phonecall.
Since I had been calling every other week for 2 months, the notes on my account would add credence to my plea for a better settlement. Here’s what happened:
On 12/8/09, I spoke with Ms. XXX in the Recovery Dept and told her that the collection department offered me a settlement of 60%, but I couldn’t afford it. I then offered her $20K to settle on both of my accounts – balances totaling over $100,000.

She said,  “That”™s an awesome settlement and if the accounts were in my department, I would accept it right now!”  Let me repeat this because it is amazing!

“That”™s an awesome settlement and if the accounts were in my department, I would accept it right now!”

Unfortunately for both of us, my accounts weren’t in her department so we couldn’t strike a deal. But this was exciting news nonetheless.
Then she said another amazing thing:

“I wouldn”™t recommend this, but if you want a better settlement, you should wait for the account to reach the Recovery Department.”

Okay…..now I don’t know about you, but when the rep at the bank essentially tells me how it works…

I LISTEN!!!!!

As you can see, this rep let the cat out of the bag. From what I understand, reps in these departments are like sales people. They get a commission. At the end of the month/year, they are offered incentives to settle more accounts. Maybe my $20k would put this rep into another bonus bracket and she would be able to afford the trip to Hawaii with her family. Who knows? Either way, I was going to wait for charge off on 12/24, wait for the account to go to the Recovery Department and probably get a settlement close to $20k.
I knew this wasn’t a sure thing, because nothing ever is. But based on the information provided thus far, it seemed likely.

Knights in Shining Armor III
Image by IslesPunkFan via Flickr

I want to add something here. In no way am I suggesting that the best route for debt settlement is to wait for your account to charge off.  Remember, debt settlement is like dating with the bank. You have to go through every “chivalrous” routine before you get kissed. In terms of the bank, chivalry includes:

  1. Calling every 2 weeks

  2. Calmly explaining your story, YOUR TRUE STORY

  3. Being gracious when offer are made, even if you can’t afford them

  4. Being genuine by letting the bank know you are not some scum-bag trying get out of your debt.

In the coming posts I will detail how the settlement on these accounts actually went down.
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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