In Part 1 of this article, we examined the common fee structure used in the debt settlement industry and concluded that $1,000s can be saved using the do-it-yourself approach. Further, we saw that the savings in money also translates to a big savings in TIME. Simply put, when you don’t have to pay $1,000s in fees, you can get out of debt much faster, even if you don’t settle your debts for percentages as low as professional companies might achieve (which is really not the case anyway). Also, we saw that the DIY approach to debt settlement restores the built-in flexibility in the month-to-month funding level for the program. Now let’s look at three more excellent reasons why the do-it-yourself approach is safer than hiring a third-party debt company.


One of the main reasons that people hire settlement companies (when they could otherwise successfully negotiate their own debts) is because they don’t want to deal with collection phone calls. After all, it seems easier to just agree on a monthly amount, send in a check once per month, and have the settlement company deal with all the phone calls, right?

Wrong! Here’s the reality: You will receive just as many phone calls from creditors when you hire a settlement company as you will handling your own negotiations. The exception is when the settlement company uses a “cease communication” letter. In order to block creditor harassment, many settlement companies send out letters to your creditors demanding that they make no further attempt to contact you by telephone.

This is an OBSOLETE and DANGEROUS technique. It is obsolete because it has been over-used, to the point where many collectors routinely ignore such letters. It is dangerous because many creditors react harshly and negatively to such letters, to the point where they ACCELERATE the collection process by sending the account to an attorney for litigation. End result: A lawsuit that stresses out the client and often forces them into bankruptcy court. The best settlement companies no longer use this technique. Instead, they simply encourage customers to change their phone number, or use a combination of caller ID and call screening to cut down on the collection activity.

There is nothing that a settlement company can do to block creditor harassment that you cannot do for yourself, with less risk and less expense.


One big fear that consumers have as they try to tackle their own debt negotiation program is that they won’t get creditors to settle. “I’m not a professional negotiator,” they say. “Why would a creditor settle with me?”

The truth is that many of the big credit card banks AUTOMATICALLY send out settlement offer letters or make verbal settlement offers right before charge-off and also during the collection process. More and more, creditors see the logic of settlement, and they frequently extend these offers when the account reaches a certain stage.

In many cases, all that is necessary to obtain a 50% settlement (or less) is to accept the letter that comes in the mail automatically!

Guess what? When the settlement company gets the same offer, all they’re going to do is take it on your behalf. When I was running a large settlement company operation, one of the toughest questions to answer was when clients asked, “What did you do to earn your big fee? All you did was take the offer that came in the mail anyway!”

Why should you pay $1,000s in fees just to accomplish something that’s going to happen anyway?


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While there are thousands of banks across the country that issue credit cards, all but a very small percentage are issued by the top 10 major credit card banks. All of these top banks absolutely REFUSE to deal with settlement companies. They have instructed all collection agencies and all collection attorneys that work on their debt assignments to REFUSE settlement offers from third-party settlement companies. These banks HATE settlement companies. Right or wrong, they believe that settlement companies are actually encouraging people to default on their obligations. Knowing what I do about settlement companies, I totally disagree with this position. However, the practical effect is that no settlement company can truthfully say that they do settlements directly with the major creditors, and yet EVERY settlement company takes on clients that have accounts with them.

There is NO WORKING RELATIONSHIP between the settlement firms and the banks. This automatically means that consumers signing up with “good” companies still have to wait past charge-off in order for the negotiation to begin. This creates much greater risk of legal action. In effect, hiring a third party company today is the same as paying someone to get you sued sooner rather than later.

Here’s the interesting part. These same banks WILL settle directly with their customers, usually at 50% or less before charge-off. They just won’t accept settlements from professional negotiators. In fact, if they find out a professional is on the job, they often immediately sue the client. So what do the negotiators do? They coach the client on how to settle on their own, then charge their negotiation fee anyway. This is nuts! Why should you pay out hard-earned cash to a settlement company for a job you’re actually doing on your own? It makes no sense.

It’s safer to negotiate directly on your own with your creditors.


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Let’s summarize the advantages of do-it-yourself debt settlement versus hiring a professional company. By handling the negotiations yourself, you will:

  1. SAVE $1,000s in unnecessary fees.
  2. GET OUT OF DEBT FASTER, since all your money goes toward settlements.
  3. Enjoy the FLEXIBILITY and RELIEF that you need in your monthly budget.
  4. SAFELY HANDLE CREDITOR CALLS without the use of obsolete and dangerous techniques.
  5. LOWER YOUR RISK by dealing directly with your creditors without an intervening third-party.

When you add it all up, debt settlement is a great strategy for dealing with problem debt, but it’s far better to tackle the job on your own than use a third-party debt company. You know the old saying, “If you want the job done right, do it yourself!”

ZipDebt = Fast Relief

Debt settlement is just as much about managing risk as negotiating savings. The 36-48 month programs offered by most debt companies have high risk for collection lawsuits. It's far more effective to "fast track" debt settlement in 12-18 months.

ZipDebt = Affordable Help

Instead of paying fees as high as 20-30% of your TOTAL DEBT, it’s far more affordable to work with a professional consultant who only charges 15% of the SAVINGS achieved via the negotiations. This approach saves you money and creates a win-win scenario.

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