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Back-End Debt Settlement as a Viable Alternative for Cash-Strapped Consumers

23rd May 2011
By sharondarochelle40 in Business Law
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Any financial services broker has seen the following, probably many times over.

Buried in a mountain of debt, consumers have a limited number of options: Attempt to pay off whatever is owed in full, run far away, or elect for the nuclear option that is bankruptcy. Declaring bankruptcy eliminates debt and also kills one's credit for a long stretch, often a decade, though it can sometimes seem like the only way out. But there's another alternative for dealing with debt, one that can drive business to brokers who know how to effectively go about handling the process: back-end debt settlement.

Essentially, debt settlement back-end work is about negotiating with a creditor to pay off a loan for a portion of what's owed. The settlements typically range from about 20 to 75 percent of the unpaid balance and are arranged as one-time lump payments, with the idea that the debt will then be considered settled and reported to credit agencies as such. While this does leave a mark on one's credit, the advantage for consumers is that they can sometimes save thousands of dollars and be relieved of the albatross several years of debt can become. A debt settlement service can be of premium value, to say the least.

There are limitations, of course. Settlements can only be negotiated on unsecured loans, ones that have no guarantee or assured method for collectors to be remunerated. Debt collectors must obey various state and federal guidelines, and a good debt settlement agent is vigilant of many things, including:

* Knowing the ins and outs Fair Debt Collections Practices Act which gives debt collectors a long list of things they can't do, like calling after 9 p.m. local time, printing the debtor's name on a "bad debt list," or threatening legal action or arrest, as well as a range of other rules and regulations. Every violation carries a $1,000 fine levied by the Federal Trade Commission, which can be used for leverage in negotiations.

* Knowing how different debt collectors operate, as strategies for negotiating with them can depend on how much is owed, the size of the firm, and many other factors.

* Knowing which debt settlement affiliate program can work best. Examples of some of the different settlement options include commission-based performance programs and attorney models, be these face-to-face or remote options. A good debt settlement agent is a liaison as much as anything, a middle person in the true sense of the term.

Today there are a wide range of affiliate programs and resources available for financial service professionals such as loan agents and insurance brokers to earn commissions by getting their clients in contact with reputable debt settlement companies. These programs are a 'win-win' as the brokers have the opportunity to add additional revenue streams to their service offerings while the end consumers have an opportunity to escape from the mountains of debt that they may be currently struggling to overcome.

TJ Sedaghatfar has extensive experience with debt settlement back-end work, having worked in debt settlement affiliate programs for several years.
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