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Did You Know “Debt Restructure” is Better Than “Debt Settlement?”

What am I to think when a site says:

“Debt Restructure” is better than “Debt Settlement” and is FTC complaint.

What am I to think?

Here is the full image of the site with the claim on it.

Did You Know Debt Restructure is Better Than Debt Settlement?

What makes the statement even more ironic is that the company making the statement is called Next Generation Debt Settlement. So would Next Generation Debt Restructure be a better and more complaint company?

I suppose next we’ll have companies calling debt settlement something even stranger like “Debt Sex Fest” and use that to try and confuse consumers. It’s not the name companies need to worry about, it’s simply complying with the laws covering debt relief services. Debt restructure or debt settlement, it’s still the same damn thing.

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Did You Know Debt Restructure is Better Than Debt Settlement?
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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.
  • Richard

    To Steve and ‘Observer’ – I thank you for your responses and I certainly will research the Debt Restructuring product further. Because I had worked for a debt settlement company whose quality of service and ethical standing I personally was well-acquainted with and believed in; and because, as a budding entrepreneur starting as an affiliate seller/marketer, I have a sincere desire to render a truly beneficial service to people who are in vulnerable positions and in dire circumstances, I want to be 100% certain that I am offering products and services of the highest integrity. It’s not easy trying to find reputable, FTC compliant back-end processors whose offerings are beyond reproach, even if not perfect. I will go back to my processor and see what information they are willing to share. I did get the impression, and I will ask, that they have debt buyers who are not purchasing debts in bulk but are targeting the accounts of only those clients that are enrolled in their program. ‘Observer’, I will follow your suggestions (as many as can be executed) and hopefully get some real clarity on this. Thanks again to all.

  • Richard

    To Steve and ‘Observer’ – I thank you for your responses and I certainly will research the Debt Restructuring product further. Because I had worked for a debt settlement company whose quality of service and ethical standing I personally was well-acquainted with and believed in; and because, as a budding entrepreneur starting as an affiliate seller/marketer, I have a sincere desire to render a truly beneficial service to people who are in vulnerable positions and in dire circumstances, I want to be 100% certain that I am offering products and services of the highest integrity. It’s not easy trying to find reputable, FTC compliant back-end processors whose offerings are beyond reproach, even if not perfect. I will go back to my processor and see what information they are willing to share. I did get the impression, and I will ask, that they have debt buyers who are not purchasing debts in bulk but are targeting the accounts of only those clients that are enrolled in their program. ‘Observer’, I will follow your suggestions (as many as can be executed) and hopefully get some real clarity on this. Thanks again to all.

  • Observer

    Richard,

    While it is true that creditors select accounts to bundle and sell to purchasers just after charge off, it is a small percentage.

    The criteria used for selecting which accounts to sell off is internal to the creditor.

    Purchasers do have relations with creditors they buy from and do have some input in the make up of the portfolios they purchase i.e. geographic make up of portfolios, balance size etc…, but it is very limited input. Even more, the examples I just gave are generally applicable to the repurchase of debt that has been first purchased from the creditor then bundled and resold to another buyer who has particular tastes.

    *RJM Acquisitions buys from Citi, re-bundles the debts and sells to another buyer.*

    What you are suggesting, and how you outline what happens right after charge off and within 12 months is just not being done, no matter who is telling you it is. Not to any degree that can be mass marketed (or should be marketed at all in my opinion).

    Many creditors are holding onto debt longer after charge off than in the past.

    Some creditors, such as AMEX, do not sell debt.

    Here is what I would suggest you do if you are to commit to promoting something like this:

    1. Identify the investor of the charged off debts. Come back to this thread and post that information. You will get assistance with researching them.

    2. Post the consumer contract that is in use for this “debt restructuring” program in order to get good feedback here.

    3. Locate consumers who have used the process successfully who are willing to be interviewed. These would be people who are done with the process, and who paid their settlements to the investor/purchaser. I know that not everyone would volunteer, but some will, especially if they can do so anonymously. Steve would surely personally interview the happy customer and verify the details while not publishing their names.

    4. Request the principles and operators of the program come to this site and describe their business model and that they be open to answering questions from industry pros.

    Short of having done these things, I would caution you from involving yourself and your good name with this process.

    Please excuse my pessimism, but the process outlined in this thread looks like a money grab by profiteers with a shelf life of about 18 months.

  • Steve Rhode

    I’ve yet to meet a consumer that actually had all their debts paid off. I’ve seen it sold all over but no examples of it actually being put in place.

    As an example look at the comment from Kyle Hartfield on this other post about a company that claimed they provided a service as you described. “As for the hedge fund, out of the 95 clients and an average of three accounts per client NOT ONE ACCOUNT was ever purchased, The response that I received from Hassan was the the hedge fund will only pick up accounts that they can buy for 10% and they aren’t required to purchase any accounts. Which is the exact opposite from his original pitch. “

    I think you’ll be interested in this other past article on the subject, “Do Debt Settlement Company Relationships With Hedge Funds Create a Fiduciary Problem for the Consumer?

    Keep reading and commenting.

    Thanks.

  • Richard

    I have read and gained much from many of your articles, Steve, and I say keep it up. However, about your claim that debt restructuring is the same as debt settlement, I have to disagree. I sold debt settlement programs with a reputable DS company that was a casualty of the FTC TSR passage (the company could not stay afloat financially for the next 3-4 yrs). Notwithstanding the fact that I lost my sales job, I applauded the ruling for its consumer advocacy (the same scrutiny ought to be paid to the credit card issuers for their onerous interest rates….but that’s another story). I am now seeking to become an affiliate and am researching back-end processors that are reputable and FTC compliant. I came across this same website (NGDS Inc) and have researched the emerging debt restructuring option and it, so far as my research has uncovered, is far preferable to debt settlement.

    Why? With DS the client saves money in an escrow account until enough has accumulated to pay off a negotiated settlement with the creditor. This will happen one account at a time over 2-5 yrs, average. Meanwhile, the client must deal with the risk of lawsuit (which CAN be preempted, depending upon the DS company’s internal resources & relationship/history with the creditor); and the creditor’s credit standing will take a hit for 2-5 yrs (average length of time for a DS program) but it CAN be repaired at the end of that time (bear in mind that the client’s credit history, in many cases, has already disqualified them for credit due to high DTI and/or credit behavior – but they need to focus on the more immediate need of getting rid of the debt that’s accruing interest that compounds daily); and creditors can wait years before receiving their settlement which adds significant stress to the debtor-creditor-DS Company dynamic.

    With DR the client will still have to go in arrears for 6-7 months (same as DS) at which time the DR company and/or its debt buyers will purchase ALL of the client’s debts from the creditors at a reduced percentage of the balance (but more than what collection agencies buy for). Now, all of the client’s creditors are paid and those accounts are settled in less than 12 months as opposed to 2-5 years. At that point, once the accounts are settled, the client pays the DR company thru a monthly payment program and what the client pays is the reduced amount plus a fee. And the payment term is in accordance with the debt amount so that the payments are affordable. Moreover, the client can make those payments without the overriding worry of threats of lawsuits and/harassing phone calls. Above all else, the client does not have to file bankruptcy, does not have to pay exorbitant compound interest rates (which often result in a lifetime debt burden that, when satisfied, pays back 3x the principal, AND the client can begin their credit restoration within 12 months as opposed to 2-5 yrs.

    This is what I have discovered, Steve. As an honest, ethical debt counselor/salesman who insists on doing things the right way I am heavily leaning towards DR as I see it to be the better debt relief option for people burdened with unsecured debt. I welcome your thoughts on this and the thoughts of any other contributor to this discussion. Thank you.

  • Richard

    I have read and gained much from many of your articles, Steve, and I say keep it up. However, about your claim that debt restructuring is the same as debt settlement, I have to disagree. I sold debt settlement programs with a reputable DS company that was a casualty of the FTC TSR passage (the company could not stay afloat financially for the next 3-4 yrs). Notwithstanding the fact that I lost my sales job, I applauded the ruling for its consumer advocacy (the same scrutiny ought to be paid to the credit card issuers for their onerous interest rates….but that’s another story). I am now seeking to become an affiliate and am researching back-end processors that are reputable and FTC compliant. I came across this same website (NGDS Inc) and have researched the emerging debt restructuring option and it, so far as my research has uncovered, is far preferable to debt settlement.

    Why? With DS the client saves money in an escrow account until enough has accumulated to pay off a negotiated settlement with the creditor. This will happen one account at a time over 2-5 yrs, average. Meanwhile, the client must deal with the risk of lawsuit (which CAN be preempted, depending upon the DS company’s internal resources & relationship/history with the creditor); and the creditor’s credit standing will take a hit for 2-5 yrs (average length of time for a DS program) but it CAN be repaired at the end of that time (bear in mind that the client’s credit history, in many cases, has already disqualified them for credit due to high DTI and/or credit behavior – but they need to focus on the more immediate need of getting rid of the debt that’s accruing interest that compounds daily); and creditors can wait years before receiving their settlement which adds significant stress to the debtor-creditor-DS Company dynamic.

    With DR the client will still have to go in arrears for 6-7 months (same as DS) at which time the DR company and/or its debt buyers will purchase ALL of the client’s debts from the creditors at a reduced percentage of the balance (but more than what collection agencies buy for). Now, all of the client’s creditors are paid and those accounts are settled in less than 12 months as opposed to 2-5 years. At that point, once the accounts are settled, the client pays the DR company thru a monthly payment program and what the client pays is the reduced amount plus a fee. And the payment term is in accordance with the debt amount so that the payments are affordable. Moreover, the client can make those payments without the overriding worry of threats of lawsuits and/harassing phone calls. Above all else, the client does not have to file bankruptcy, does not have to pay exorbitant compound interest rates (which often result in a lifetime debt burden that, when satisfied, pays back 3x the principal, AND the client can begin their credit restoration within 12 months as opposed to 2-5 yrs.

    This is what I have discovered, Steve. As an honest, ethical debt counselor/salesman who insists on doing things the right way I am heavily leaning towards DR as I see it to be the better debt relief option for people burdened with unsecured debt. I welcome your thoughts on this and the thoughts of any other contributor to this discussion. Thank you.

    • http://GetOutOfDebt.org Steve Rhode

      I’ve yet to meet a consumer that actually had all their debts paid off. I’ve seen it sold all over but no examples of it actually being put in place.

      As an example look at the comment from Kyle Hartfield on this other post about a company that claimed they provided a service as you described. “As for the hedge fund, out of the 95 clients and an average of three accounts per client NOT ONE ACCOUNT was ever purchased, The response that I received from Hassan was the the hedge fund will only pick up accounts that they can buy for 10% and they aren’t required to purchase any accounts. Which is the exact opposite from his original pitch. ”

      I think you’ll be interested in this other past article on the subject, “Do Debt Settlement Company Relationships With Hedge Funds Create a Fiduciary Problem for the Consumer?

      Keep reading and commenting.

      Thanks.

    • Observer

      Richard,

      While it is true that creditors select accounts to bundle and sell to purchasers just after charge off, it is a small percentage.

      The criteria used for selecting which accounts to sell off is internal to the creditor.

      Purchasers do have relations with creditors they buy from and do have some input in the make up of the portfolios they purchase i.e. geographic make up of portfolios, balance size etc…, but it is very limited input. Even more, the examples I just gave are generally applicable to the repurchase of debt that has been first purchased from the creditor then bundled and resold to another buyer who has particular tastes.

      *RJM Acquisitions buys from Citi, re-bundles the debts and sells to another buyer.*

      What you are suggesting, and how you outline what happens right after charge off and within 12 months is just not being done, no matter who is telling you it is. Not to any degree that can be mass marketed (or should be marketed at all in my opinion).

      Many creditors are holding onto debt longer after charge off than in the past.

      Some creditors, such as AMEX, do not sell debt.

      Here is what I would suggest you do if you are to commit to promoting something like this:

      1. Identify the investor of the charged off debts. Come back to this thread and post that information. You will get assistance with researching them.

      2. Post the consumer contract that is in use for this “debt restructuring” program in order to get good feedback here.

      3. Locate consumers who have used the process successfully who are willing to be interviewed. These would be people who are done with the process, and who paid their settlements to the investor/purchaser. I know that not everyone would volunteer, but some will, especially if they can do so anonymously. Steve would surely personally interview the happy customer and verify the details while not publishing their names.

      4. Request the principles and operators of the program come to this site and describe their business model and that they be open to answering questions from industry pros.

      Short of having done these things, I would caution you from involving yourself and your good name with this process.

      Please excuse my pessimism, but the process outlined in this thread looks like a money grab by profiteers with a shelf life of about 18 months.

  • Steve Rhode

    LOL.

  • David

    How about debt rearrangement services, debt reorientation services, or debt reconstruction services? Do those have to comply with the new FTC rule?

  • David

    How about debt rearrangement services, debt reorientation services, or debt reconstruction services? Do those have to comply with the new FTC rule?

    • http://GetOutOfDebt.org Steve Rhode

      LOL.

  • ComplianceSlave

    Been seeing a lot of “self save” legal models that imply that settlement may occur but are contracting to fight validity or FDCPA TILA violations. My opinion is that even if compliant with TSR????, they probably will not be 1) actually consumer friendly 2) helping anyone 3) Bar compliant (fee splits, marketing, etc). This will be a problem for the lawyers. And I doubt the FTC is going to let this fly, so I will guess it will be a problem for the provider, marketers, lead gen co’s too. Time will tell.

  • http://www.ftc.gov ComplianceSlave

    Been seeing a lot of “self save” legal models that imply that settlement may occur but are contracting to fight validity or FDCPA TILA violations. My opinion is that even if compliant with TSR????, they probably will not be 1) actually consumer friendly 2) helping anyone 3) Bar compliant (fee splits, marketing, etc). This will be a problem for the lawyers. And I doubt the FTC is going to let this fly, so I will guess it will be a problem for the provider, marketers, lead gen co’s too. Time will tell.

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