How Do Debts Get Settled?

For those that want to know how the sauce is made…

The process is relatively straight forward. Debts can either get settled via a 1 on 1 phone conversation with the creditor, via emailed scrub lists and various other methods from standing working relationships that negotiators may have already setup. Whatever the method of settlement it is, it typically depends on the creditor and their preference for doing business. Every creditor or debt collector is different from the next.

Establish Rapport

Working as a negotiator, if you have established rapport with a negotiator from a 3rd party collection company the odds are you’ll want to talk to them again because they’re probably great to speak with and have helped you out in the past. They’ll also make your life easier in regards to settlements and will follow up with good deals

1-on-1 Phone Conversations

Negotiations can be done over the phone however it usually takes numerous phones calls. A PoA is usually sent out and it could require time to follow up. PoAs can sometimes have trouble getting correctly uploaded and there are occasional setbacks that can delay the negotiation process. Accounts bounce around all the time. Sometimes we have to call many different locations and creditors due to this. On the other hand, sometimes we just find the account at the right place and right time and the process goes smoothly from start to finish.

Email Scrub List

Just as debt collectors like to buy debt in bulk, they also like to settle debt in bulk. This can make the negotiation process easier for both sides, but it doesn’t always allow for that interpersonal/human aspect of negotiations. This can be both a good and a bad thing. This is the preferred method of negotiations for many companies and is the best and quickest way to do deals in bulk.

The process itself can be quite tricky depending on who and what you are negotiating for. The percentage of debt you save clients and the reductions you get can change like the seasons. Parameters can change so much it’ll shock you. What is considered a good deal one month can easily become a bad deal next month.

A lot of creditors work only via email scrub lists. This is simpler and easier for companies that wish to get rid of debt at an accelerated rate and it makes the most financial sense for companies to setup settlements this way. If you can compliantly setup deals via email it really doesn’t make much sense to have to communicate via phone for bulk negotiations.

Manager Exceptions

Saving a lot of money off particular large debt amounts is crucial whenever possible, since these will be the most impactful to the client’s savings amount and overall amount saved. In these scenarios it can really help to reach out to a manager and try extra hard to get those account balances down the extra percentage because savings can vary so widely and significantly. Larger accounts help skew the reduced percentage in our favor if we can outperform on them. Although it’s not always feasible, try to use whatever negotiating tactics are at your disposal since an extra nudge can really go a long way.

Percentage Off the Current Balance

Everything is typically done via a percentage off the current balance owed. Once you reach an agreement you’ll likely receive a settlement letter or offer letter and from their you’ll arrange a payment plan with the creditors. In order to do that you’ll simply call the creditor and arrange the payment plan.

Once some debts get settled you’ll want to setup a payment plan with the creditor. That can either be an electronic payment plan (ACH) or checks sent via mail.

Once all payments plans are established and setup you are good to go.

Client Collaboration

You can also collaborate with clients to have them on the phone at the same time as you are speaking with a negotiator. This isn’t the preferred method of negotiating but it’s the path we sometimes have to take if we are left with no other options. Some creditors will give some debt relief companies a hard time with their authorization and make them jump through unnecessary hopes in regards to PoAs. Due to this they ask that you get the client on the phone so that the transaction can be processed in tandem with the credit card company, the debt relief company and the client all on a three way. This isn’t always the ideal situation for negotiating but it’s unfortunately one that has to be utilized sometimes.

The Process

For the most part, this is what covers the process. There is some back and forth on the phone negotiations portion and a lot of transferring and holding but that is just a part of the job and how the industry works.

The process of getting out of debt is not easy for those in it, but things tend to eventually work themselves out with the right plan. The best path forward is not always the easiest path forward, so it’s best we don’t take anything for granted.

All in all, debts can get settled in a whole host of different ways. If you are working with a debt relief company you might not necessarily need to know all the ins and outs but it’s important to know that accounts do get settled and will be taken care of if your company knows what they’re doing.

In Conclusion

Debts can get settled in a variety of ways. The main thing to understand however is that they do eventually get settled. And when they get settled you put your best foot forward and move onto bigger and better things.

A lot of consumers don’t want to know how the sauce is made. Apple runs its entire business on everything being closed circuit – for the most part. This requires less effort on the consumer and it can make for a really aesthetically pleasing product. However, what is lacking is customizability. With most apple products you can’t go in and upgrade the RAM after the fact (or you can but apple tends to make it very difficult to do so). You can do so with a Microsoft/windows product.

It all boils down to what kind of consumer you consider yourself to be. Do you like to know the inner workings of everything or are you content just being able to sit back relax and save some money?

May you make the best possible decision for you and receive the best possible outcome for your future.