Debt Relief Programs – A Case Study

I can talk about how debt settlement works in theory all day. But at some point, you want to see what it actually looks like with real numbers, a real timeline, and real results. So that's what I'm going to do.

This is a walkthrough of an actual client's program — the starting point, the strategy we built, how each settlement played out, and where she ended up when it was all done. I've changed her name and some identifying details for privacy, but the financial figures represent a real outcome from our program.

Where "Maria" Started

Maria came to us with $35,200 in credit card debt across four accounts.

A major bank card with $12,400 at 24.99% APR. Another major bank card at $8,800 and 22.49%. A retail store card at $7,500 and 26.99%. And a third bank card at $6,500 and 19.99%.

Her combined minimum payments were $1,056 a month. She was making them — barely — but after rent, utilities, groceries, transportation, and insurance, she had almost nothing left. The balances weren't moving because the vast majority of each payment was going straight to interest.

I see this exact situation multiple times a week. Someone making $50,000 to $65,000 a year, carrying $25,000 to $40,000 in credit card debt, making payments on time but watching the balances stay flat — or even grow. At her current pace, Maria was looking at 20+ years to pay everything off and a total cost of over $55,000 including interest.

Her credit score was 618 when she enrolled. Already damaged from high utilization — all four cards were near or at their limits.

The Consultation

During her free consultation, we walked through her options honestly.

Consolidation was technically possible but not practical. With a 618 score, the best personal loan rate she'd qualify for was probably 18% to 20%. That's barely better than her credit cards. The monthly payment would still be over $750, and she'd repay the full $35,200 plus interest. It wasn't going to solve her problem.

A debt management plan through a credit counseling agency could potentially lower her rates to 8% to 12% and drop her monthly payment to $750 to $850 over 5 years. Total repaid: roughly $42,000 to $45,000. Better than minimums, but she'd still be paying for 5 years and repaying well over the original balance.

Settlement offered the most savings and the fastest timeline. Based on our experience negotiating with her specific creditors, I estimated settlements averaging 45% to 55% of the balances. With a monthly program contribution of $650, we projected the program would take 24 to 36 months.

She chose settlement. The $650 monthly deposit was $406 less than the $1,056 she'd been paying in minimums — immediate budget relief from day one.

The Strategy We Built

Not all settlement programs should be approached the same way. We build a strategy based on the specific creditors involved, and Maria's case was a good example of why that matters.

We targeted the two smaller accounts first. The retail card ($7,500) and the smaller bank card ($6,500) were prioritized because they'd accumulate enough funds for settlement offers fastest. Getting early wins builds momentum — both for the client's confidence and for demonstrating that the program is working.

The largest account was strategic patience. The $12,400 bank card was held for later. Larger balances need more time to accumulate settlement funds, and in our experience with that particular issuer, settlement offers tend to improve as accounts age further into delinquency. Waiting worked in Maria's favor.

The mid-range account was scheduled based on that creditor's patterns. Every major issuer has its own internal settlement policies and timing preferences. We know from experience roughly when each creditor becomes most receptive, and we planned Maria's negotiation timeline accordingly.

How Each Settlement Played Out

Month 8 — Retail card settled. The balance had grown to $8,100 with accrued interest and fees. We negotiated it down to $3,645 — 45% of the balance. This creditor accepted the first offer after brief negotiation. Retail card issuers tend to be more willing to settle, and the timing was right.

For Maria, this was the moment the program became real. One account fully resolved, one creditor off her back. She told me later that getting that first settlement confirmation letter was the first time she felt like she could actually get through this.

Month 14 — Smaller bank card settled. Balance had reached $7,200. Settlement: $3,240, which was 45% of the balance. This one took more negotiation. The creditor initially countered at 60%, but my team pushed back based on Maria's documented hardship and our experience with their settlement patterns. We held firm and they came down.

Month 22 — Second bank card settled. Balance was $10,100. Settlement: $5,050 at 50%. This creditor was one of the tougher negotiators — they typically settle in the 48% to 55% range and rarely go below that. Getting 50% was a solid result given their track record.

Month 30 — Largest bank card settled. Balance had grown to $14,500 with interest and fees. Settlement: $7,250 at 50%. The patience paid off. By waiting for the right moment on this account, we reached a settlement percentage that saved Maria thousands compared to what we might have gotten at month 12 or 15 with the same creditor.

The Final Numbers

I'll lay this out completely because I think transparency about money is the most important thing in this industry.

Total original debt enrolled: $35,200. Total paid to creditors in settlements: $19,185. Program fee (20% of enrolled debt): $7,040. Total cost of the program: $26,225. Savings compared to original balance: $8,975. Savings compared to paying minimums over 20+ years: approximately $28,775.

Her monthly deposit during the program was $650 — that's $406 less per month than she was paying in minimums before enrollment. Over 30 months, that freed up over $12,000 in cash flow.

Was the 20% fee worth it? I obviously think so, but let me let the math speak. Without our negotiation, Maria was on track to pay $55,000+ over 20 years. Through our program, she paid $26,225 over 30 months. Even including our fee, she saved nearly $29,000 and got out of debt 17+ years faster.

What Happened to Her Credit

I'm sharing this because it illustrates exactly what I describe in our credit score guide.

Enrollment (Month 0): 618. Month 5 (lowest point): approximately 540. The first several months of missed payments hit her report, and this was the bottom. Month 30 (program completion): approximately 575. Settled accounts replaced active delinquencies. The bleeding stopped. 12 months after completion: approximately 650. She'd opened a secured credit card at month 31 and used it responsibly every month. Positive payment history was lifting her score. 24 months after completion: approximately 700. She was approved for a conventional credit card and was actively saving for a home down payment.

From 618 to 540 to 700. The dip was real. The recovery was real too. And she went from drowning in $35,000 of credit card debt to debt-free and on track for homeownership — all within about 4.5 years.

Why This Program Worked

I see programs succeed and I see them struggle. The factors that made Maria's program successful are the same ones I emphasize with every client.

She made her deposits consistently. Missing program deposits delays settlements and extends the timeline. Maria made her $650 payment every month for 30 months. That discipline drove the entire program.

She had genuine financial hardship. This matters for negotiations. Creditors are more willing to accept settlements when the borrower's hardship is real and documented. Maria's debt-to-income ratio and financial situation supported the negotiation case we made on her behalf.

She didn't take on new debt. I see some clients open new credit cards or take on new loans during their program, which undermines the entire process. Maria avoided new debt completely.

We knew her creditors. Years of experience with these specific issuers gave us a significant edge. We knew their internal timelines, their typical settlement ranges, and the right moments to push for better offers. On a $35,000 program, even a few percentage points improvement in settlement rates translates to thousands of dollars.

Is This What You'd Experience?

Every situation is different, and I want to be clear about that. The settlement percentages, timeline, and credit recovery trajectory depend on your specific creditors, total debt, monthly contribution, and financial circumstances.

That said, Maria's results are within the normal range of what we see. Settlements of 45% to 55% are common. Program durations of 24 to 36 months are typical for this debt level. Credit recovery following the pattern she experienced is what I've observed consistently across hundreds of clients.

The best way to know what's realistic for your situation is to have us look at your specific numbers. Our free consultation reviews your accounts, your income, and your creditors — and gives you honest projections based on what we've actually achieved with similar cases. No obligations, no pressure, no sales tactics. Just numbers.

Frequently Asked Questions

Are these results typical? They're within the normal range. Settlement percentages typically fall between 40% and 60%, and timelines depend on total debt and monthly contributions. Maria's outcomes were solid but not unusual for our program.

How much did she save total? Maria paid $26,225 to resolve $35,200 in debt. Compared to paying minimums ($55,000+ over 20 years), she saved approximately $28,775 and got out of debt about 17 years faster.

Did she owe taxes on the forgiven debt? She received 1099-C forms for the forgiven amounts, but because her total debts exceeded her total assets at the time of settlement (she was technically insolvent), she was able to exclude the forgiven amounts from taxable income using IRS Form 982. Most of our clients qualify for this exclusion.

What if one of her creditors had refused to settle? It happens occasionally. When it does, we work with the client on alternatives — continued negotiation, a direct payment plan with that creditor, or if necessary, adjusting the overall program strategy. We don't just shrug and move on.

Could she have done this on her own? She could have tried. But creditors respond differently to individual callers versus professional negotiators with established track records. Our experience with her specific creditors — knowing their settlement ranges, timing, and negotiation tendencies — is what got her 45% to 50% settlements instead of the 55% to 65% range that self-negotiators typically land.

What's the minimum debt for your program? We generally work with clients who have at least $7,500 to $10,000 in qualifying unsecured debt. Below that, the fee structure may eat into savings too much for the program to make financial sense.