Debt Settlement Tsunami Continues in 2010!

In February 27, 2010
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Do you remember what it was like back in October 2008? That’s when the financial crisis rocked the world and we all collectively held our breaths and waited to see if the entire banking sector would collapse. From my own perspective, it had pretty much been “business as usual” in the world of debt settlement up to that point. And then the whole world froze for about two weeks. I had just started to wonder about what the future would hold for my own business. And then the dam burst wide open.

Starting around mid-October 2008, the phone started ringing off the hook, and I could barely keep up with the flow of inquiries. The tidal wave continued all throughout 2009. The way I explain it now, with the benefit of more than a year of hindsight, is that I was already “surfing in the ocean of debt,” and had been doing so for many years. After the financial crisis unfolded, a giant tsunami rolled up right underneath me, so I just kept surfing! The banks were seeing default rates double, triple, and even quadruple in some cases compared to “normal” times, and that spike in the number of financially distressed consumers was reflected in the volume of settlement activity.

Long story short: 2009 was a *very* good year to settle unsecured debts. Virtually every major creditor was accepting settlements at figures at or below the thresholds I had been seeing previously, and many consumers therefore did better than expected with their settlements. I don’t mean to imply that it was “easy” to settle with creditors last year. It still required determination, patience, persistence – and, of course, a really good coach! 🙂

That said, it was certainly less difficult for many consumers to achieve settlements than it would have been prior to the financial meltdown. Bear in mind that none of this had anything to do with the bank “bailouts,” TARP, or any of the other emergency measures taken by the Federal Reserve or the Treasury Department. The banks are agreeing to settlements simply because it’s in their own best interests to do so. They don’t settle for less than the full balance out of altruism, or any sort of desire to actually help people. They do it to *survive*. Settlements are what creditors do in order to reduce their losses (before charge-off), or to recover against losses already booked (after charge-off).

So due to the economic recession, 2009 was certainly a banner year for settling debts. How about 2010? As I write this post at the end of February, I can say with confidence that 2010 will also be a very good year for settlements. ZipDebt clients have reported settlement activity that represents more than $1.8 million of forgiven debt, and that figure is only the total for January and February to date. In other words, it’s still “business as usual” with all of the major creditors, just a whole lot more of it than in “normal” economic times when default rates are below 5% (rather than above 10% the way they are today).

If you are facing a credit card debt burden that you simply cannot sustain anymore, and you’re starting to worry that your situation will lead to bankruptcy, take the time to check into debt settlement as a potential solution. It’s not the right strategy for everybody with a debt problem, but if you’re a good candidate for this approach, it works like magic.

If you do decide on debt settlement as your strategy of choice, steer clear of the third-party debt companies that just want your fee money up front. Nowadays, settlement negotiations are an extremely common thing, and there is absolutely no reason to pay thousands of dollars in “fees” to some rip-off company who will not perform as advertised. You CAN learn to negotiate and settle your own debts. All that’s needed is a little training and coaching, and here at ZipDebt, that’s what we do best.

 

6 Comments

  1. Thanks for the great feedback, Martin!

  2. To everyone out there reading the Blogs from Charles and our comments, I can say from the bottom of my heart that Charles is an excellent straight forward, but at the same time compassionate coach.

    He takes his time to answer people and walks us patiently through our initial ‘jitters’ dealing with the banks. When asked, he even provided me with a few role-play sentences on what to say and what not to say to creditors at any particular time during the negations.

    I have been a very satisfied and content client since about 6 months and the savings I have achieved through his support and excellent timing of his advice are substantial. I am about half-way through with my settlements and ‘together’ we are dealing with 8 different creditors and 15 different accounts. His industry knowledge, intuition and experience “when to do what” are remarkable and spot-on.

    When all this is hopefully over soon, I will make sure to recommend Charles and his excellent material to many people. That is the least I or we could do to somehow try to pay back Charles for all the savings we achieved from his program and advice.
    Thank you Charles, from a grateful satisfied customer.

  3. Sunil, thanks for your comment, and congratulations on whacking more than $300,000 of debt down to size! 🙂

  4. yes, Charles i was one of those lucky guys who googled you at right time last year . my rate of interest was jumped from 5% to 29.9% and landed me in financial trouble , with your blessings i settled 309k for 82k about 27% on average on my credit cards, in six months. with the help of your SINCERE AND VERY PROMPT GUIDENCE DURING THE NEGOTATION PERIOD .phone trap is the highlight of the programm.The only thing i did on my own was called every one in the sixth month, and some banks had already sent offers in the mail without even calling them that give me the chance to call back with the counter. honestly i was afraid to call the banks back so just waited for the last minute.
    thank you Charles

  5. Tom, thanks so much for the great feedback. My take on the recently reported bank “profits” is that those “earnings” are illusory at best. It’s all due to manipulation of the balance sheets, and there is still a gargantuan pile of “junk” out there that still has to unwind. So I’m expecting the tidal wave of defaults to roll through the rest of 2010 and probably through 2011 as well.

  6. Charles,
    I’d just like to publicly say again, thanks for the coaching you provided to us. Every ounce of advice you’ve ever given to us (and we asked a lot), has been 100% “on the money”, so to speak.

    My biggest mistake of the past few years was trying so desperately to hang on to a “sinking ship”. And your straight to the point advice spared us from “drowning”. My only regret was that we didn’t find you sooner! Following your advice, for about a year now, we’re on the road to recovery!

    The irony of the situation about the banks & lenders is that even with the “tsunami” defaults, they’re still reporting HUGE profits. I’ve heard some pathetic “sob stories” from lenders recently…but, that’s all that they are…stories.

    Again, Charles…Thanks for everything!
    Tom in CT

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