Debt Reduction

As the economy continues to sputter, dealing with mounting consumer debt has become the in thing to do on the internet. Google debt negotiation and you get, as of October 14, 2011: 3,200,000 hits. That’s a lot of information, most of it contradictory and self serving. In an effort to settle the waters and give you the straight scoop, here’s what you need to know.

There are basically 3 approaches to debt negotiation: debt consolidation, debt negotiation and debt elimination.

In debt consolidation, all of your debts are rolled into one monthly payment, normally handled by the debt consolidation company. They decide who is paid and when. Sometimes they get discounts, sometimes they do not. The companies make their money by charging you a spread between what you pay them and what you pay out; it may be a monthly fee, interest, or some other payment.

In debt elimination, the company offers some kind of quasi-legal reason as to why the debt is illegal or cannot be collected. This may make sense in today’s world of robo-signing (you don’t think that stopped at just mortgages, do you) but in final analysis the debt is owed to somebody somewhere; and eventually that party (or their actual assignee) will step forward. So your debt elimination money has gone down the drain. This approach is similar to the “sovereign citizen” claim that income taxes are not owed. There’s a name for people who follow that program: “federal inmate”.

In debt negotiation, attempts are made to contact the creditor and obtain a discount on the amount owed, or the interest to be charged, in exchange for a lump sum payment or lower monthly payments.

The difference between Results Advisors and the rest of the debt negotiation industry is we negotiate the debt first, and then get paid. No upfront fees, no monthly fees. Just one fee after the debt is negotiated to your satisfaction.

How do we do this? How do we get paid? The differences are small but significant. First and most importantly, we actually do the work you hired us to do: make the calls; send the letters; do the screaming and yelling needed sometimes.

Second, we actually understand what’s going on in the debt industry and can take advantage of the problems the industry has created for itself. Let us ‘splain.

Back around 1990, a few very bright souls on Wall Street figured out that consumer debt could be assembled into giant blocks and then resold as a bond, which paid investors interest. The investors were interested because the interest rates were high, and besides, the rating agencies, based on the frosting on the pile of crap was tasty, told them the investments were safe and therefore were approved to sell to widows and orphans (we take comfort there is a special circle in Dante’s Inferno set aside for these evil souls, the real evildoers in the debt fiasco). Wall Street liked the idea because the spread on this stuff was huge, and this spread allowed for big bonuses, which in turn led to massive estates in the Hamptons, really cool corporate jets, your own pet member of congress and cabinet secretary, and lots of hookers and cocaine. But we digress.

At first this strategy was used on mortgages. Then the idea really caught on and Wall Street began to run out of mortgages. So they began to look for other debts to pack into blocks and ship. Within a few years, all consumer debt was packed into blocks and resold. This included car loans, credit card debt, student loans, business accounts receivable, you name it. So much debt was being moved into so many blocks that corners began to be cut. That has now become a big issue; if you understand how big an issue, you have some real advantages in dealing with collection agencies.

What corners are we talking about? The best analogy is found on TV crime dramas. If you think about what the hero detective testifies to (in the part before the defense attorney successfully pins the crime on the defendant’s evil, separated at birth twin) the detective talks about how the bullet casing was collected, how the fingerprints were lifted, and how all of that points to a certain conclusion. That’s called “chain of custody” and if the chain of custody is broken, the evidence is not admitted.

The same rules apply to debts. Debts have been sold and resold from the original creditor to collection agency 1 to collection agency 2, etc. This buying and selling is big business and generates billions of dollars. Sometimes the actual proof that the debt collection agency has the debt is there, and sometimes it is not. By knowing what to ask for, and when to ask for it, discounts on the debts can be obtained.

If you would like a consultation on how you debts may be reduced, often to 30 to 60 cents on the dollar, call or email for more information.