In "Part 1" of our discussion on disclosures and the new debt settlement assistance laws, we looked at an issue that is usually front and center on peoples minds when it comes to seeking help with their debts. This of course is how much will it cost and to a lesser degree, how and when will the fees be charged once they sign on to a debt negotiation program.
Aside: If you have "landed" here without reading Part 1 of this discussion on debt settlement law disclosures, I recommend that you go there now, and then join me back here once you have finished.
If you are considering hiring a debt negotiator to help you reduce the amount of your outstanding unsecured debt, you likely have many questions. (Especially if this is the first time that you have sought this type of help. Let's hope this is your first and last time.) As I mentioned above, the foremost question on your mind is probably "How much will it cost?", but a close second might be "How long will it take?". And this is a fair question given that part of the reason you are likely considering debt settlement is so that you can get rid of your debts as quickly as possible.
Until the new debt relief laws were introduced in 2010, companies and individuals offering these services could, for the most part, make whatever claims they wanted with respect to their services. And how long it would take them to get you out of debt was no exception. However, since the new FTC laws were enacted, debt settlers must tell you how long it will take them to achieve the results that they claim they can achieve.
Now, if you are at all aware of how the debt settlement process works, you will realize that it is impossible to know exactly how long it will take to settle a debt. The process is a negotiation after all, and the timelines of negotiations are unpredictable. Having said that, debt settlers must base their timelines on experiences they have had with previous customers in similar situations, and be prepared to back up their claims with solid data. So if a company markets the fact that it can get you out of debt in 36 months or less, they must have a reasonable basis for making this statement.
The law actually takes this a step further. Not only do debt settlement assistance providers have to disclose how long the entire program might take, they must also disclose to you how long it will be until they are able to make an offer to each of your creditors that is likely to be accepted.
You see, if you have more than one debt enrolled in their program, they will not all be settled at the same time. One may be settled after six months, another may take 36 months. Why? Well, this is mainly due to your (the customers) ability to raise enough money with which to pay off a settlement agreement once it is reached. Which brings us to our next disclosure.Disclosure #3: How Much Will You Have To Save Before An Offer Is Made?