I'm on a DSP, How Long Will it Take For My Creditors to Accept Settlements?

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I'm on a DSP, How Long Will it Take For My Creditors to Accept Settlements?

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We are answering our customer's top questions regarding their participation in the Debt Settlement Plan (DSP).

We want our customers to find continued success by fully understanding their plan and what it takes to be successful.  

This month's question: How long will it take for my creditors to accept settlements?

Each customer's situation is different and there are a variety of factors that go into a settlement agreement.

Here are some things to consider regarding settlements. 

  • Factors that can affect settlements.  There are many factors that can affect your settlements, including the type of creditor, the creditor's internal policy, the length of delinquency, and the amount you owe.
  • Debts are often sold.  Keep in mind that creditors often sell or move collection responsibility to third party firms like collection agencies or debt buyers, which can actually sometimes work in your favor when securing the best deal.
  • Timing and patience.  Timing and patience are extremely important when securing a settlement agreement. On average, most people experience their first settlement after six to eight months of consistent payments. 

DSP is not a "quick fix" and may not erase your debt overnight. Patience and consistent payments are essential ingredients to success with your DSP.  

If you have a question you would like to see posted please feel free to leave it in the Comments section or, ask directly in our Ask the Expert Forum.

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  • I've played phone tag with my Persels attorney but received a follow up letter. I've made two payments so far and have had no issues, except wanting the phone calls to stop! :)

  • Hi RoseLong,

    When an account is settled it is for less than the full balance. This amount can vary for each creditor based on the settlement amount agreed upon. Please review the tax implications involved with a DSP for more information on the amount settled.

    Suzanne

  • Hi Roselong,

    Unfortunately that is not how it works. The good news is that the money used for the settlements is held in an account to pay the settlement. Hope this helps!

    Suzanne

  • Will each settlement have to wait until the funds are in the account or will they take the funds knowing a monthly payment(s) will be continuing ?

  • I have received a collection call from Chase Bank and was informed that they don't accept settlement offers and do not work with settlement companies.  How should I handle this creditor?

  • How can I get cease and desist letters sent to my creditors?

  • I was told that if I had enough escrow that the little ones would be taken care of first.  Lets say I have one that is a balance of $300 and they take $150 as a settlement, then how come that hasn't been done since I do have enough in my escrow to cover the smaller of my creditors?  Going on my second payment (sunday).  I think the "my program" button should be corrected to reflect wether or not a letter for a settlement has been started, etc.  When I look at the list of creditors and now that two payments have been entered into escrow and nothing looks as if being done, i feel lost.  If it would show some type of movement or something to show progress on my program.  Also why is it only a few of the creditors recieved desist letters and not all of them?  Some people have stated you collect and collect and wait till there is a larger sum to get more paid off at once but in the mean time, the creditors have started legal actions and what not.  Please tell me you don't just collect the fees and let this happen to us and really screw us up.

  • @Bonnie  Cease and Desist letters are sent to your creditors by Persels & Associates after you make your first payment. These letters instruct the creditors to stop contacting you regarding the debt, and instead contact Persels & Associates. Unfortunately these letters only legally apply to third party collection agencies and collection attorneys but not too the primary creditors like Capital One and Bank of America. Hope this helps!

  • @huckabee2011  As I mentioned to @Bonnie not all cease and desist letters are legally accepted by all creditors.

    Unfortunately there is not a standard when it comes to settlement. Each company is different and everyone’s situation is different. Our negotiators have built up relationships with the creditors and know when a particular creditor may have special offers or may be willing to accept a settlement. In many instances our customers are ready for the settlement and want it to happen so they can cross a creditor and a debt off their list. All of this can vary based on the customer's payment amount and what the creditors may be willing to accept. On average, most creditors will accept 45 - 60% of the original balance over 1 - 6 payments. In some instances they may be willing to accept less if the money is available for quick settlement, or they may extend the terms but ask for a higher amount. The settlement world is very fluid as it changes quickly and often. The amount of time it takes to settle an account may vary based on the balance of the account, the creditor, and how quickly funds are built up in your escrow account. In most cases our clients can expect to receive a settlement in months 6 - 8 if they engaged a creditor with a smaller balance of less than $1,000. For higher balances it may take 12 to 18 months before seeing the first settlement. Again, settlement takes time and patience.

  • I was told  my payments should be finish in 2 years ,,,,,how long moore do I have to pay.....//

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