FamilyMeans Debt Management Program

Debt Settlement Programs from Settlement Companies

• FamilyMeans debt management programs repay the full balances owed and only negotiate the ongoing repayment terms for the payment amount and interest rate. The balance owed is never negotiated.

• Settlement companies negotiate the balance to be paid, after the account has fallen delinquent and when enough funds have been saved to pay a portion of the balance to the creditor.

• The concessions offered by the creditors involve reduced payments and reduced interest in most cases, but, in addition, most creditors agree to stop charging late and over limit fees once you’ve established your program with 3 consecutive payments. This process allows your account to remain in good standing as payments continue in a timely manner, while you avoid ongoing delinquencies and negative credit reporting.

• Interest, late fees, and over limit fees continue to accrue, increasing the overall balance owed, while awaiting a payment offer. If the creditor/collector proceeds with legal action, legal fees can also be attached to the balance owed. The account becomes past due and is reported as delinquent to the credit reporting agencies.

• Our debt management programs make monthly payments with the approval of the creditor. Your funds are disbursed within 15 days of being received to make sure the creditor is paid as required, and are never held month to month.

• Monthly payments are not paid to the individual creditors. Your monthly deposit is kept in a trust account until a sufficient amount has built up to engage a creditor in settlement negotiations.

• FamilyMeans will never tell you to stop paying your creditors. If you can, you should always send payment. Through a debt management program, payments are sent consistently as an act of good faith to show the creditors that you are staying involved and continuing communication and repayment efforts with them.

• Some settlement companies suggest you stop sending payments to the credit accounts. And, if you’re paying the settlement company a payment, most consumers don’t have sufficient income to, in effect, make double payments. Some creditors send the account directly to “legal” (the legal department) upon notice of the company’s involvement.

• FamilyMeans charges a nominal monthly fee while on the debt management program. The only ‘up front’ fee is $25 to originate the account processing. The faster you pay off the debts, the less you will pay in fees as they are only charged while you are actively repaying debt through the program, month to month.

• Fees vary from company to company. Read the fine print. You will likely pay a monthly fee out of your monthly deposit amount, as well as a substantial origination fee. Some companies accept your first 3 months of deposits as their ‘set up’ fee.

• Our Consumer Credit Counseling Services sends monthly reports to reflect the payments disbursed as well as the estimated decreasing balances of your individual creditor accounts.

• Reporting of some kind is mandatory, so you’ll likely receive a statement. Creditors will continue to notify you of the increasing balance, as well, unless or until a settlement agreement is reached.

• When your debts are repaid through a our program, the credit report will indicate “paid in full” status.  Settlement arrangements do not normally update “paid in full” status.

• Credit reports usually report “settlement account paid.” Since the debt was not actually “paid in full”, that cannot be stated. The amount forgiven will also be listed on the report, showing the amount you did not pay back.