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  • Writer's pictureRevolution Debt Relief

Debt Settlement ~ A Deeper Look II

Updated: Apr 22, 2022

Debt Settlement sometimes referred to as debt “adjustment”, debt relief or negotiation is the settlement of debts typically through a third party with your lender.

Whether you are local to Los Angeles or somewhere else in the United States. You probably are looking for solutions to become debt-free. Most Americans carry too much debt. Such as credit card debt, private student loans and sometimes medical debts. So like most of us who have a car loan and not enough extra cash, we are forced to google for “debt help” and see what “pops” up.

Best Debt Advice

The first problem is where to find the best debt advice. Honestly, some of the strongest words of wisdom I can give you is exercise your due diligence. When I say that, I don’t mean simply go down a checklist and expect an ethical company because they meet some arbitrary requirements. In the debt relief industry, some of the most “questionable” players on the surface look reputable, so be cautious.

I would do my research, read the reviews, usually the bad ones first and go with my gut. You can, of course, check your local better business bureau (BBB), secretary of state where the company is located (This way you can find out if they're even registered). Also, the federal trade commission (FTC) website is a wealth of information on the industry in general.

If there are any “red-flags” you should get a clue between those three sites. In addition, as of 2010 debt settlement companies can not charge upfront fees, so If you are ever asked to pay before at least one of your debts have been settled, that is illegal and most likely a scam. In that case, you would want to report them to the attorney general of your state.

Fighting Compound Interest

So next how do we get out of debt with the credit cards companies when all we can make our minimum payments. Clearly, we realize we need extra money to make up for the typically high-interest rates. The most recent statistics I read were 18-23% is the average A.P.R. on new credit cards.

If you want to get your Halloween fright early, go to a debt calculator and punch in your interests and time you think it will take to pay off your debts. I know we all expect to hit the “Powerball” each week but I suggest you put a minimum of 60 months as your expected time to pay off your lenders.

The reality of “compound” interest can be shocking. Depending on your interest rate, more than likely you will owe 100-150% of the balance making minimum payments. Here are three examples at the low end of an 18% A.P.R. over 60 months.

$10,000 = $14,432.20 (Year 1) or $24,232.20 over 5 years. (198.3% Increase).

$25,000 = $36,080.89 (Year 1) or $61,080.49 over 5 Years. (198.3% Increase).

$50,000 = $72,160.99 (Year 1) or $122,160.99 over 5 Years. (198.3% Increase).

This is a reality that most people do not want to recognize but is key in understanding the need to be proactive and find not just the best program but the best professionals as well. Someone who will advocate for you and has the knowledge and experience to untangle this financial mess.

The “Experts”

I won't say which industry leader gave this advice only that their initials are “C.K.”, here is what in their “expertise” they offer the average person as a solution for avoiding bankruptcy when buried in too much debt. I will get to their disclaimer where they admit to being fully compensated by the banking industry, but more on that later, wink-wink :) Let's start with this nugget of “wisdom”.

“Try negotiating settlements with creditors on your own. Offer an amount that you can pay immediately, even if it’s less than what you owe. If you have credit card debt, consider a balance transfer. A balance transfer is when you move debt from one credit card to another, usually to take advantage of an introductory 0% interest offer on the new card. Balance transfer cards typically have one of this 0% intro APR offers for a specified period of time and may charge a fixed fee or a percentage of the amount you transfer”

Okay, to be fair when the ship is going down jumping into the 0% “dingy” isn’t a bad idea. Unfortunately much like the actual example, I just gave eventually you realize you're still in the middle of the ocean on a dingy.

This assumes that your one of the fortunate people who somehow got into substantial debt. Does not have the resources to pay it off, and still manages to have a credit score that justifies a 0% interest rate on open line of credit. People who are typically searching for debt relief solutions do not have these options available. As for the recommendation from this "Expert" on finance that you can simply take the “gold bars” from under your bed and offer a reasonable lump sum settlement Certified mail to your original lender, good luck.

$25 Fee

It seems most of these experts have never been late on a monthly payment received a late fee or had to request a $25 reversal. If they had they may find giving professional advice to the public to go and settle their own debts with attorneys or seasoned “cut-throats” for thousands to tens of thousands of dollars as ridiculous as I do.

As I do research for these topics I find mostly “stale” information that reminds me of what you learn in a classroom setting. When I say that I mean the so-called experts from many of the biggest companies talk as if “bad-choices” are the reason for your situation.

That if you only worked harder, worked smarter, changed your habits and saved ~ Sunshine and Unicorns would pop out of your cereal box. I don’t mean to be patronizing towards the “experts” who preach the gospel of prayer at the church of Big Banks and Collections Companies but I strongly disagree.

Sometimes we do make bad choices but sometimes bad things happen to good people. That's why all insurance companies have clauses for “Acts of God” because they recognize that there are things in life none of us can foresee.

As you can read below, C.K admits to living off the revenue of the banking industry. At the same time like a politician from Washington swearing that lobbyist have no effect on their votes, claims they are impartial and the friend of the consumer.

Conflict Of Interest, The Standard In The Industry

“Editorial Note: C.K. receives compensation from third-party advertisers, but that doesn’t affect our editors' opinions. Our marketing partners don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when it’s posted. Advertiser Disclosure. We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials. Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.”

My point is that I don’t consider these guys bad but there is clearly a conflict of interest. When you are reading advice on debt consolidation, a debt management plan or just credit card debt relief. Much of the time what you get is poor advice and inaccurate information. If you are lucky you may talk to a genuine credit counselor who knows the industry but I'm not sure if they have the actual business experience a seasoned professional does.

Avoiding The "Nuclear" Option

So for example when you have private student loan debts you don’t need a textbook solution you need a real-world strategy. Debt settlement can be a useful tool when executed properly. It is far better than the “nuclear” option which is bankruptcy.

Although again the experts claim it’s a reasonable option when you can’t pay back your original creditor. I find seven to ten years on your credit report and 20 years on your public record a high price for not taking advantage of all your best available options. As I always mention a far better alternative to bankruptcy is utilizing a sound debt validation program.

This is very similar to debt settlement but uses consumer law to resolve your alleged debt obligations. This is a far more comprehensive strategy and amazingly cost half as much. Please contact me if you would like further information on your best possible debt relief solutions. Best regards,

Mark Diaz


  • Consumer Advocate

  • Credit Counselor

  • Debt Specialist

Revolution Debt Relief LLC

Contact Information:

  • 752 South Main Street

  • Los Angeles, California

  • 90014-2013

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