12 Steps to Success on a Debt Settlement Plan

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12 Steps to Success on a Debt Settlement Plan

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You have decided to enroll in a debt settlement plan which was not an easy decision. Now that you have a plan of action for getting out of debt it is important to know the steps you can take to be successful. With a debt settlement plan there is a lot of information to digest in a short period of time and we want to help you soak it all in. 

The most important thing to keep in mind is that settlement is not a quick fix; it takes patience and your active participation to be successful! 12 Steps to Success on a Debt Settlement Plan

  1. Understand how settlement works. Unlike a Debt Management Plan, settlement requires that you stop paying on your accounts. While this may seem counterintuitive, this is actually what starts the ball rolling when it comes to settling your accounts.  Our goal is to negotiate with your creditors to accept less than the full balance owed, and they will not be willing to do that if the accounts are current. Delinquencies however, often cause a rash of calls from your creditors and third party collection agencies they send your accounts to. While being behind on your accounts is not great for your credit the affect is less detrimental than having to file for bankruptcy. Most importantly be sure to read and keep a copy of your client agreement to refer to. 
  2. Make your budget count.  Whether you complete your budget during your initial consultation with one of our counselors or online its important to be honest about your budget. Your settlement plan is based partly on your budget, as our goal is to build funds in your escrow account as quickly as possible. Additionally we want to be sure settlement is the right choice for you.  We are here to help and want to be sure your plan is the one that will be most beneficial to you and your situation.  
  3. Keep us in the loop. We all know things change; people move, phone numbers change, emails are added, and even relationships change, so please be sure to provide us with the most up to date information so we can contact you in the even we need to.  
  4. Make My CareOne your friend.  Your My CareOne account is where we provide all of the latest updates and things happening with your plan. For example, we may have a settlement offer and need you to approve the success fee before we can release the funds to your creditor. This needs to be handled as quickly as possible,  as sometimes offers are only good for a short period of time. A good rule of thumb is to check you're My CareOne account daily for communications, and minimally at least once a week.  
  5. Understand success fees. Everyone wants to know what the service costs and with our debt settlement plan success fees are the only fees we charge. These fees are only paid when a successful settlement is reached.  
  6. Know how to reach us.  We are just a phone call, email or chat away from answering your questions or addressing your concerns. You can contact Settlement Services at 1-800-CARE123 or email us through the Help Center gadget in your My CareOne portal.  Our Ask the Expert forum is another place you can get your questions answered and the Ask the Community forum is a great way to gain the support of others. 
  7. Your monthly payments are important. We all understand things happen from time to time, but it is extremely important that you understand what may happen if you change or miss a payment and a negotiated settlement is in the works. We rely on your timely payments to build value in your escrow account in order to have the necessary funds for settlements to occur. Your creditors are expecting timely payment, after they agree to accept less and we don't want them to change their mind.
  8.  Collection calls a necessary evil of settlement. As I mentioned earlier your accounts must be delinquent before your creditors will agree to accept settlements. Since the accounts are behind, most likely you will begin to receive calls from your creditors and third party collection agencies, sometimes even law firms demanding payment. We are here to help so please let us know if this is happening. A benefit of settlement is having access to an attorney who can assist you in handling increased collection activities at a greatly reduced rate. And most importantly know your rights when it comes to unfair debt collection practices.  
  9. The paper trail. If you receive any correspondence from your creditors it is essential that you submit the information to us so that we can review it and keep tabs on where your accounts are. It is quite typical for your accounts to change hands several times before settlements are reached. You can fax any correspondence you receive to 1-888-862-0623.  
  10. Build up your escrow account.  If you receive a bonus at work, a tax refund, or if you're really lucky some money for your birthday consider adding these funds to your escrow account. The faster you build your escrow account the faster we can help to negotiate settlements on your behalf.  
  11. Expect the unexpected. We all know life has a funny way of throwing us a curveball now and then; be prepared for these by adding emergency savings as a line item to your budget. This way if you have to pay for car repairs or an unexpected medical bill you don't have to miss your settlement payment.  
  12. Use the tools, they are free! We offer a wide variety of tools and resources for everyone on our site. If you haven't had a chance to use them, now is the time to start. While our main goal is to help you get out of debt we also want to give you the tools necessary to stay out of debt and be financially fit. Our community is one of the best ways to connect with others that are in your shoes and hear how they have overcome their struggles and are successfully on their way to becoming debt free. Be sure to join in on the conversation even if it's just to say hi.  

Armed with these twelve steps to success you are ready to begin your journey to debt freedom and know that you are not alone.

Photo Credit 

Suzanne CramerSuzanne Cramer 

Suzanne is a certified credit counselor for CareOne Debt Relief Services and is a Social Media Specialist. Suzanne supports our Ask the Expert forums as a coach and writes for our A Straight Talk on Debt and Divorce, Debt and Finances blogs. You can also follow Suzanne on Twitter where she shares the latest debt industry news, and tips to keep your finances in check with her @AskCareOne and @ADivorcedMom accounts. 

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  • How long does it take to have CareOne send out settlement offers.

  • @jbelben  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.

  • I'm getting a little nervous. I have always made at least the minimum payment on my cards. But now I am in a situation where I can't meet these obligations. Most of the comments on the posts are from clients on dmp not dsp. Is there a site where I could communicate with my group (dsp) or read theie updates. Thank you

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