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I Want to Start a Debt Settlement Company But Have Some Questions. – Doyle

This came in through the reader question section of the site but I thought debt relief industry readers would have a lot to share to help Doyle by putting in in the industry section. I’ll leave this one for everyone to offer their feedback and advice to help Doyle.

Doyle writes:

“Dear Steve,

I just came across your site and I love it! What a neat idea!

I will get right to the point…

I want to start helping people settle thier debts. Yes, I want to start a debt settlement company. I actually have spent most of the last 7 years working with in some form or fashion in money management and so I do have quite a bit of experience with consumer debt issuses.

In the past though, I have mainly worked as sales reps for other companies. I had to learn first hand about all of the bad pactices, gotchas, and just plain crooked debt settlement companies and other financial products on the market.

Anyway, after getting fed up with with eveything I quit the financial services business in early 2009 and have since been back into construction and working for an environmental firm. I currently make $60K a year at my job, but I am working 70-80 hours per week and am out of town 4-5 days per week. I don’t like this situation and neither does my wife and kids!

Anyway, I have decided that it’s time to go back to doing what I love. (helping people get on track fanancially) Except, this time, I am going to create my own program. I am open to suggestions as to how to structure the fees, but what I am thinking at this point is to have a small monthly fee and then charge a backend performance fee based on the amount saved, charged after each debt is negotiated.

Anyway… there is no way I am going to over everything you would need to know about me in a breif email. I would like to continue furthur dicussion with you about this. I will be happy to go into furthur detail about my background and experience, show you debts that I settled, and what ever you would like to know.

So I have two basic questions for you.

1) Do you have any suggestions for me? Fee structure models that work?
2) Would you be willing to refer people to me? [Sorry, no.]

I am sure that you know as well as I do that most people can settle thier own debts, especially with the education that you provide on your website and other good books and information. The problem is that not everyone WANTS to settle thier own debts. Thier are many people out there that would prefer to pay someone else to do it for them, just the same way that many people would prefer to pay someone else to change the oil in their car.

I am asking if you would consider referring those people that come to you, specifically asking for someone to do it for them. Obviously, you would need to know much more about me in order to do this.

One other note is that I want to intentionally grow this business SLOWLY. I have a good job and don’t need the money to support my family right now. (Although I expect it to in the future) I only want to start with a few clients and add on as I have the time to take care of them. Happy customers are the best advertising! So this would be you trying me out as well. I would want to prove my value to you slowly as well and in the future we may be talking bigger things.

I look forward to your reponse and I hope we can conrinue discussing this!

Doyle”

I Want to Start a Debt Settlement Company But Have Some Questions.   Doyle
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Dave

    Doyle, you should look into becoming an Independent Debt Advisor using the MyDebtPortal.com system, we have a reseller program for you to start your own business quickly and easily and for little cost. You will then offer to your clients a user controlled system where the consumer deals with their clients directly, you provide them advice on how to use the letters and the system to try and reach the best settlement possible, and when successful, you earn a piece of what you have saved them! No upfront fees for the consumer, you support them and help them out of their financial hardship! You (and consumers) can try the system free – its always Free unless they are able to reach a succcessful settlement using the system. And the system is fully FTC compliant! – No Upfront Fees, Full disclosure, No Power of Attorney etc. etc.

    Good luck in your search!

    -Dave

  • Dave

    Doyle, you should look into becoming an Independent Debt Advisor using the MyDebtPortal.com system, we have a reseller program for you to start your own business quickly and easily and for little cost. You will then offer to your clients a user controlled system where the consumer deals with their clients directly, you provide them advice on how to use the letters and the system to try and reach the best settlement possible, and when successful, you earn a piece of what you have saved them! No upfront fees for the consumer, you support them and help them out of their financial hardship! You (and consumers) can try the system free – its always Free unless they are able to reach a succcessful settlement using the system. And the system is fully FTC compliant! – No Upfront Fees, Full disclosure, No Power of Attorney etc. etc.

    Good luck in your search!

    -Dave

  • Jason Taylor

    Doyle,

    Read the FTC rules. Most businesses require lots of Capital to start. To comply with the TSR, you better have a lot of money because you won’t be getting paid from clients for a long time. You had also better have a good law firm like Loeb and Loeb guiding you though all of the state and federal laws.

    With that said, most companies in the industry are exiting, so if you have the capital, it could be an opportunity for you.

    If starting a business was easy, everyone would do it. Id think long and hard before you jump into any business. 80% of small businesses fail in the first 2 years and unless you have the captial in addition to he hard work and brains, your likely to be one of the 80%.

    Jason

  • Andy Faria

    Hey Doyle,

    You’ve definitely started your research in the right place. This site is best source available for information on the debt relief industry.

    To start, forget the idea of charging a small monthly fee. Recent FTC regulation has banned the collection of any fees until a debt has been settled, a small monthly fee could land you a huge fine.

    I would suggest your read the full version of the FTC regulations, the complete Telemarketing Sales Rule can be found here ..
    http://settleshort.com/news/wp

    You will also want to begin researching the different state laws for the states you want to work in. Some states have adopted a version of the UDMSA or specific laws that pertain to debt settlement providers, so to work in those states you will need to meet their specific requirements, such as licensing, bonding, certification, etc. The TSR does not supercede these state laws.

    The most important thing is to always place people before profits. If you do this, you will succeed. Good Luck.

  • http://northeast-properties.com Andy Faria

    Hey Doyle,

    You’ve definitely started your research in the right place. This site is best source available for information on the debt relief industry.

    To start, forget the idea of charging a small monthly fee. Recent FTC regulation has banned the collection of any fees until a debt has been settled, a small monthly fee could land you a huge fine.

    I would suggest your read the full version of the FTC regulations, the complete Telemarketing Sales Rule can be found here ..
    http://settleshort.com/news/wp-content/uploads/2010/08/FTC-Rule.pdf

    You will also want to begin researching the different state laws for the states you want to work in. Some states have adopted a version of the UDMSA or specific laws that pertain to debt settlement providers, so to work in those states you will need to meet their specific requirements, such as licensing, bonding, certification, etc. The TSR does not supercede these state laws.

    The most important thing is to always place people before profits. If you do this, you will succeed. Good Luck.

    • Jason Taylor

      Doyle,

      Read the FTC rules. Most businesses require lots of Capital to start. To comply with the TSR, you better have a lot of money because you won’t be getting paid from clients for a long time. You had also better have a good law firm like Loeb and Loeb guiding you though all of the state and federal laws.

      With that said, most companies in the industry are exiting, so if you have the capital, it could be an opportunity for you.

      If starting a business was easy, everyone would do it. Id think long and hard before you jump into any business. 80% of small businesses fail in the first 2 years and unless you have the captial in addition to he hard work and brains, your likely to be one of the 80%.

      Jason

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