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A Review of the Everest Debt Solutions Debt Settlement Client Agreement

Recently I wrote about a debt settlement company called Everest Debt Solutions here and here. I managed to get my hands on one of their client agreements so I wanted to review it for you to help you understand what it all means to the best of my ability. I think you’ll find some eyeopening sections in my comments below the sections.

Of particular interest is the fact that the agreement has no refund policy at all and the program fees are front loaded in the agreement. If you signed the agreement and cancelled latter a big amount of money paid in will be program fees that you will not get back.

Page 1 of Everest Debt Solutions Debt Settlement Agreement

Debt Settlement Agreement

A Review of the Everest Debt Solutions Debt Settlement Client Agreement

This Debt Settlement Agreement (“Agreement”) is made this ___ day of _____ 2009 between Everest Debt Solutions, 12517 Linebaugh Ave Box 380, Tampa, FL 33626 (800) 258-4131 and __________ (“Client”). This contract shall become operative on the date executed by both Parties.

Note: The address listed for EDS is actually a UPS mail center private mail box and not their actual street address.

  1. Services. Everest Debt Solutions agrees to provide debt settlement and restructure services to Client under the terms and conditions of this Agreement (the “Service”). This service consists of negotiating with creditors on behalf of Client for reduction of unsecured debt and formulation of a payment plan. Everest Debt Solutions will use commercially reasonable efforts to settle Program Debt, as defined below. Everest Debt Solutions will timely respond to all Client inquiries. Everest Debt Solutions will maintain the confidentiality of the personal financial information provided by the Client.

    On acceptance of Client into the program, Everest Debt Solutions will provide a “Welcome Packet” containing a Schedule of Program Debt, Account Agreement and Disclosure Statement, along with further information about the program. Client understands this is not an attempt to repair credit, validate debts, and/or dispute debts.

    Interesting that only upon signing and sending back this agreement to Everest Debt Solutions does the client then get the account agreement, disclosure statement and further information about the program.

  2. Client Obligations. Client will perform the following obligations:
    1. Client will satisfy Client’s financial obligations to creditors through the process known as debt settlement. Client voluntarily enrolled into a debt settlement program offered by Everest Debt Solutions after being educated on the various options available. The success of the debt settlement program is based on the ability of the Client to set aside funds, which will allow Everest Debt Solutions to negotiate the settlement of debts.

      I assume when they say the client was educated on the various options available they are talking about the options discussed on their website. Those options that have on their site are debt settlement, debt consolidation, credit counseling service, and bankruptcy. I assume that the success of the program will be horrible if the client is having financial problems and will be unable to save up funds or set aside funds.

    2. Client shall inform Everest Debt Solutions of any additional debtor, co-signer or guarantor of any Program Debt. Client is responsible for notifying such additional debtor, co-signer or guarantor of participation in the Debt Settlement Program.

      Any other people associated with the account are going to want to know since when the client falls behind on the debts included it will negatively impact the credit of any additional debtor, co-signer or guarantor.

    3. Client will provide a written list of all unsecured debts that he or she wants Everest Debt Solutions to settle and/or restructure. Everest Debt Solutions has the right in its sole discretion to exclude certain debts, and will consult with Client to develop a mutually agreeable list of debts (the “Schedule of Program Debt”). A Schedule of Program Debt is incorporated into this contract by reference. This schedule will contain the name of the creditor, account number and outstanding balance. Debts added to the Program Debt after signing this Agreement will be subject to additional fees. All information provided by Client must be truthful and accurate. Everest Debt Solutions is under no obligation to verify information supplied by Client, but may do so at it’s sole discretion.

      I have some real issues with this section. First, if you enter the program and assume that all your debt will be included. It may not be. EDS may exclude “certain debts” but we don’t know what type of debts those are. Second, if you add a debt latter it will cost an additional amount just to add it. Third, since the majority of debt settlement consumers don’t have the money to settle debts when they enroll in debt settlement programs the stated balances at the time of this agreement will be way off when money is saved to settle them. Additonal items increasing the balance may include penalty interest, accrued interest, late fees, and/or legal fees. If EDS is under no obligation to verify the information, it seems like an incomplete professional service that can lead to huge balance discrepancies.

    4. Client will forward all correspondence from creditors to Everest Debt Solutions, including collection letters. If creditors telephone, Client will refer them to Everest Debt Solutions. Client will not discuss his or her financial situation with creditors or discuss settlement. If the creditor continues to make contact, Client will contact Everest Debt Solutions and provide the creditor’s name, telephone number and name of contact person.

      This section seems to imply that creditors either should not or can’t contact clients enrolled in a debt settlement program. That is an incorrect statement. Creditors and collectors can continue to contact the debtor. The debtor has voluntarily elected to pay an outside party, in this case EDS, for debt settlement services but that does not alter or change the relationship between the creditor and debtor. I am especially troubled by the statement that “Client will not discuss his or her financial situation with creditors or discuss settlement.” Why? What is inappropriate about informing the creditor of the current situation. What needs to be hidden?

    5. Over the duration of the program. Client will set aside in an existing or a new bank or savings account approximately 40-45% of the Program Debt. The monies set aside by Client shall be deposited into a Special Purpose Account established on Client’s behalf with Global Client Solutions (“GCS”), NoteWorld Servicing Center (“NSC”) or any third party trust account selected by Client. The funds in the account will be used to satisfy settlement of the Program Debt negotiated by Everest Debt Solutions to pay Everest Debt Solutions its Service Fee. The number of months that funds are set aside and the amount to be set aside each month will be determined by Everest Debt Solutions from the information contained on the Schedule of Program Debt. The payment schedule, which documents the results, is incorporated into this Agreement by reference. The monies set aside are to be used for program debt and Everest Debt Solutions service fee payment until the Program Debt is settled or upon termination. Client and only Client will be in control of all settlement funds, and under no circumstances will Everest Debt Solutions have custody or control of the funds Client has set aside to fund the debt settlement program.

      This part seems a bit vague. It does not address any service fees charged by GCS or NSC as a result of managing the account. Additionally, it would create a problem if the Client was unable to alter the amount deposited into any debt settlement fund servicing account. If the Client can’t modify those amounts then it could be argued that the Client does not in fact have complete control over their account. It appears from this section that client funds will be withdrawn or debited from the client bank account and then deposited into a GCS or NSC account. If EDS will not have custody or control of funds then I guess the client will direct funds to be sent to a creditor for settlement. I’m not clear who is controlling that process.

    6. Client shall make no further charges to any account listed on the Schedule of Program Debt. Client will not continue to incur debt or open new charge accounts, except that Client may retain and use one charge care for emergency purposes only. Client will immediately inform Everest Debt Solutions of such emergency use. This account shall not be included in the Everest Debt Solutions program and cannot be issued from the same bank as any account submitted in the program.
  3. Compensation. In consideration for the Service provided by Everest Debt Solutions, Client shall pay to Everest Debt Solutions a Service Fee equal to 15% of the Program Debt. Approximately 10% to 30% of the Service Fee will be paid upon Acceptance into the program. The remaining Service Fee owed to Everest Debt Solutions will be paid as defined in the payment schedule. Client agrees that he or she will not make or request changes to the payment schedule for the first 90 days following commencement of Client’s participation in the program or the first three payments, whichever come first. The payment schedule will specify the amount of the monthly Service Fee payment. Client authorizes Global Client Solutions, NoteWorld Servicing Center, or the trust account established by Client to initiate debit of Client’s bank or savings account, in accordance with the Electronic Payment Authorization, for the payment of the Service Fee. The Electronic Payment Authorization is incorporated by reference into this Agreement. Everest Debt Solutions will accept no more than two insufficient funds (NSF’s) or payment reschedules in any 12-month period. Excessive NSF’s or payment reschedules are grounds for termination. There is a $25 fee for each NSF or payment reschedule. All payment reschedules need to be authorized by a Client Service representative, and must be done at least 5 business days prior to the original payment date. A payment reschedule fee of $25 will be assessed. For your benefit, if any payments NSF, we will automatically reschedule a payment (7) seven days after the missed payment to keep you on track with the payment schedule. If a client removes an account or accounts, and later in the program reinstates said account or accounts, a processing fee of $100 will be assessed. If Client removes an account after fees have been paid in full, no credit will be applied. Client understands and agrees that Client is responsible for paying Client’s Special Purpose Accounts’ maintenance fee, which is currently $9.50 per month. Such imposed fee is in addition to and separate from the Everest Debt Solutions Data Management and Service Fee. Client hereby authorizes such fee to be automatically withdrawn from his/her Special Purpose Account.

    So the EDS debt settlement fee is 15% of the debt included in the program, with no cap. For example. If you have $50,000 worth of debt included then your service fee is $7,500, of which up to $2,250 will be required up front with the Agreement. I have no clue how the rest of the Service Fee is paid since there is no payment schedule that accompanied this Agreement. Above in the agreement it was mentioned that a fee would be charged if an account was added after the Agreement was put into service. But this section did not talk specifically about what that fee might be. Could it be the $100 add it back fee? But what really caught my eye was the fact that any fee you paid is not able to be credited, even though it may not have been earned. Let’s say you pay the entire $7,500 worth of Service Fees and then remove let’s say, a $10,000 account, you don’t get your $1,500 Service Fee associated with that debt back. And what might be some of the reasons for removing an account? The big one that comes to mind is if the creditor has informed you they won’t work with debt settlement companies or you were sued by the creditor for the debt. Seems odd that you would then have to still pay a debt settlement fee for an account that had to be removed because it could not be settled. So the client will get his bank account debited for the Service Fee and a $9.50 account maintenance fee before any money is used towards reducing the debt. Additionally the Agreement mentions a Data Management fee.

  4. Settlement Process. At such time Everest Debt Solutions has received the first payment directed toward the settlement of Program Debt, Everest Debt Solutions will commence the Service. Everest Debt Solutions will advise Client of all good faith offers made by creditors and debt collectors, and of their acceptance of any offers made by Everest Debt Solutions. Everest Debt Solutions will not settle any account without the approval of Client, who has absolute discretion to accept or reject any settlement offer. When a settlement offer is presented to Client, Client must respond to Everest Debt Solutions within 48 hours of notification. Everest Debt Solutions will arrange a payment from Client’s Special Purpose Account for settlement offers of 40% or less of current balance at time of settlement. On Client’s approval of the restructure or settlement of a particular creditors account, Client will timely ensure payment for his or her settlement account in accordance with the settlement or payment plan. At such time as a listed debt has been negotiated and settlement is reached, Everest Debt Solutions considers the debt settled and is not responsible for Client’s failure to satisfy the terms of the settlement.

    This section leaves me with some curious questions. Is EDS redirecting the mail or correspondence to them or are they saying that EDS will immediately contact your creditors and negotiate settlement offers on all accounts once the first payment is received. But if they do that, and the Client is in the process of saving the payments for settlement offers isn’t contacting the creditors straight away jumping the gun a bit? It seems that outside of communicating with creditors that a settlement offer can’t be presented to a creditor until the Client has either saved at least 40% of the current balance on a debt in their Special Purpose Account or has given EDS specific authorization to negotiate a settlement at this time they can repay with other funds. I’m a bit mystified why EDS says they will arrange a settlement payment from a Client’s account if the offer is 40% or less. Why not make the payment for any settlement offer the client has agreed to? Maybe this will make more sense as we dive further into the agreement.

    Page 2 of Everest Debt Solutions Debt Settlement Agreement

    A Review of the Everest Debt Solutions Debt Settlement Client Agreement
    1. In the event Client comes into a lump sum of money and wishes to settle all accounts before original designated completion date, Client must first pay Everest Debt Solutions’s Fee. The remainder of the lump sum will be utilized in Settling Client’s unresolved program debt.

    2. In the event a settlement offer is reached and Client does not have required funds available (as per fund transfer schedule), one warning will be given. If for a second time, Client does not have required funds available in settlement account (as per fund transfer schedule), Client may be cancelled from program due to breach of contract.

      This seems particularly harsh. Why wouldn’t EDS simply verify the funds were in the Special Purpose account prior to agreeing to a settlement offer. Making an offer based on a previous determined planned fund transfer schedule seems like it is setting up a trap for the client to fail, be terminated and EDS then retains their fee. Here is what I mean, life does not operate in a neat linear line. Chances are that a client enrolled in the program is going to have some surprise event happen that might through them off track on the originally developed “fund transfer schedule”. If I read this section correctly, EDS will attempt to settle a debt based on how much should be in the settlement account, not how much actually is in it.

    3. In the event a Term Settlement has been entered into by Client, Client will be obligated to have funds available for disbursement to creditor or debt collector in accordance with the terms of the Term Settlement Agreement. A debt that is subject to a Term Settlement will be removed from the Program if Client fails to make or seeks to defer a payment under the Term Settlement Agreement.

      What the hell is a “Term Settlement Agreement”? This is the first I’ve seen this term and it does not appear to be defined anyplace before. If I was to assume I would guess this is actually a monthly payment arrangement. But if I read this correctly, if a client makes a payment arrangement with a creditor then the client must have funds available outside the funds which are already required to be deposited into the Special Purpose debt settlement account. This would leave the consumer in a bind, they would need funds on top of what they have already budgeted to deposit in accordance with their fund transfer schedule. So if the client makes a payment arrangement directly with the creditor, the 15% settlement fee is still due EDS and if the client fails to make a payment, the account will be removed by EDS, who has already taken the fee for the debt.

  5. Term. This Agreement will terminate when each of the credit accounts representing the Program Debt is satisfied or upon termination by either party as provided below. In additiona, Client has a right of recission, as provided below in section 15.
  6. ACKNOWLEDGEMENTS AND DISCLAIMERS, Everest Debt Solutions provides consumers with a method of debt resolution known as debt settlement. Debt settlement is an aggressive method of debt management, which depends on the negotiation of mutually agreeable settlements between the consumers and the creditors. Everest Debt Solutions wants the Client to understand both the potential benefits and pitfalls that may rise out of the debt settlement process and to have reasonable expectations regarding the outcome.

    So this program is an “aggressive” approach that may not be effective and the client must have “reasonable expectations” but if the promises made are “aggressive” what would then be “reasonable”? Seems like what EDS is saying is that the program may have been oversold as aggressive but that it is not reasonable to expect what was sold.

    1. Client understands that the Debt Settlement Program was explained in detail, including full disclosure of the risks involved in Debt Settlement on the original consultation and was supported and explained in their recorded compliance call. Client states that he/she has read, understands and accepts all of the terms of this Agreement.

      It would be great to actually hear one some of those original recorded consultation calls wouldn’t it?

    2. Client is enrolling into a debt settlement program after voluntarily seeking assistance of Everest Debt Solutions. Client is set to negotiate mutually agreeable settlements between Client and creditor(s) for payment of certain unsecured debt(s) described in the Schedule of Program Debt. The success of the Everest Debt Solutions program depends upon client’s participation. If client terminates the program before the client has saved sufficient funds in the set-aside Special Purpose Account to effect a settlement, then the program will not produce the desired results.

      “Client is set to negotiate…” I thought that was the job of EDS. Or does this mean that the client is prepared to enter into mutually agreeable settlements as negotiated by EDS between the Client and creditors? What appears to be missing here is that a mutually agreeable settlement may not be able to be reached, at all.

    3. The client’s debt settlement program assumes an effort that will continue for many months. The time needed to produce a settlement depends on a number of factors. These may include: (a) Client’s financial hardship, (b) the age and balance of the accounts that Client owes to the creditor, (c) funds Client has available to pay for a settlement, and (d) the willingness of individual creditors to enter into debt negotiations and settle accounts.

      So here we discover that even though a fee was paid for debt settlement services, a creditor may not be willing to enter into negotiations and settle the account.

    4. Client understands that specific results cannot be predicted or guaranteed by Everest Debt Solutions. Summaries of the funds required for settlement, monthly savings, and the specified period of time to complete the Debt Settlement program were solely based on best estimate basis. Client understands the outcome of Everest Debt Solutions debt settlement services cannot be guaranteed and individual results may vary. Creditors are likely to continue collection efforts on delinquent accounts while enrolled in the program. Company cannot stop all calls from creditors. Collection efforts can include phone calls, collection letters, charge off reporting to the credit bureaus, contracting or selling your accounts to collection agencies or law offices, and lawsuits resulting in judgments by the courts.

      A Review of the Everest Debt Solutions Debt Settlement Client Agreement

      So if “…specific results cannot be predicted or guaranteed by Everest Debt Solutions.” then why does Everest Debt Solutions say on the front page of their website that, as shown above, Settlement Works! Lower your payments, Be debt free in 36 months, Reduce your debt by 60%. ‘Money Back Guarantee’? That sure seems like EDS is sending one message to unsuspecting potential clients but promising something different all to gether. And how about the rest of the section above? Collection efforts will continue, EDS can’t stop calls, bad stuff will be reported to the credit bureaus, and clients paying thousands and thousands of dollars to EDS can still be sued in court for the debts included. Where is this money back guarantee? It’s not in the agreement and they say the agreement constitutes the entire agreement.

    5. The Client Creditor Worksheet used in setting up program fees and length is based upon an estimated program settlement of 40 percent. The use of the 40 percent does not reflect the actual amount the debts in the program will settle for.

      Up to this point EDS has said they “Reduce your Debt by 60%” and that the 40% settlement amount is important because they will only make the payment if the settlement is 40% or less but now they clearly say the 40% amount is not the actual amount the debts will settle for. Hum.

    6. Balance transfers and accounts that are subject to a pending legal action or a judgment that has been entered will settle at higher percentages.

    7. The performance of the Service will likely have an adverse effect of Client’s credit rating and Everest Debt Solutions is not responsible for the actions of the creditor in response to settlement efforts.

      Your credit is going to be shot and creditors may do nothing or sue you. The door has been left wide open to what the “response” from your creditors will be but guess what, you still owe the full 15% fee anyway.

    8. The Service does not include the modification, correction or improvement of Client’s credit report. Everest Debt Solutions does not offer any form of credit repair or improvement to credit rating. Client does not expect to receive any. Upon settlement of an account, Everest Debt Solutions will send a copy of the settlement agreement to Client, who may forward it to the credit reporting agencies.

      Why would the client want to forward the settlement agreement. It will be reported by the creditor, including the part of the debt written off and reported as a bad debt. Have not seen EDS mention that yet.

    9. In the event a creditor or debt collector pursues legal remedies against Client, neither this Agreement nor the Service includes legal representation.

      When the client gets sued by the creditor they are on their own even though EDS has been paid a huge fee.

    10. Everest Debt Solutions may retain legal counsel in the performance of the Service, but such counsel represents Everest Debt Solutions and no the individual Client.

    11. Neither this Agreement nor the Service includes any tax representation, such as audit and verification, debt retirement, or Internal Revenue Service tax negotiation.

    12. The discharge of indebtedness is considered taxable income; Client should seek the advice of a tax professional.

      So far this is the only hint that the client may wind up owing the IRS a huge tax bill from settling their debt through debt settlement. That’s a very important point that has been seriously overlooked.

    13. Any payment by Client to a creditor listed in the Schedule of Program Debt, except in accordance with a settlement plan negotiated by Everest Debt Solutions does not constitute a payment toward the program.

      So if a client comes to an agreement with a creditor and makes a payment directly to the creditor and that changes the payment expected by EDS then it can lead to default and worse as I talked about before. If the client makes a payment directly to a creditor they just better make sure they have enough money available each month to continue to make their EDS payment.

    14. Everest Debt Solutions is not engaged in the practice of law and does not provide legal services to its clients. In the event a creditor or debt collector pursues legal action against Client, neither this Agreement nor the Debt Settlement Program includes legal representation. Client acknowledges and agrees that legal services are to be obtained independently by Client and Client is not relying on Everest Debt Solutions in any way for legal advice not shall Everest Debt Solutions be a party to any claim, arbitration, or legal proceeding arising out of the hiring or seeking of any legal advice.

      Client is on their own when the legal crap hits the fan. But I’m curious how a client is going to be able to afford to stay current on their EDS payment, pay for a lawyer, and pay any amount due the creditor as a result of a suit. Hasn’t the client simply been set up for a default in this agreement if all that happens?

    15. Client has represented to Everest Debt Solutions that Client is unable to meet the minimum payments required by Client’s creditors. If Client does not make required minimum payments to Client’s creditors, Client may be breaking the terms of the Client’s agreements with them and Client’s action will probably be reported to the consumer reporting agencies as late, delinquent, charged-off or past due balances. Client’s creditors may also raise interest rate on Client’s account and impose other penalties (late charges). Client’s account balance may continue to grow as the creditor adds accrued interest, late fees, over-limit fees and penalties. Client’s balance may increase during the term of this Agreement.

      So people participating in the debt settlement program can expect their balances to increase, and other bad stuff to happen to included accounts. This leaves me wondering how a payment schedule can ever be determined at the onset of the debt settlement program when the balances will continue to grow as the consumer attempts to save money to settle. It’s quicksand.

      Page 3 of Everest Debt Solutions Debt Settlement Agreement

      A Review of the Everest Debt Solutions Debt Settlement Client Agreement

    16. Small Balance Provision. Debt under $1,000 are not the best accounts to enroll in long term debt settlement program due to the potential of accruing interest and fees assessed by the creditor/ Unless the account is four months or greater in delinquency, the client is advised to not enroll such account; if the client feels that it is in his/hers best interest and chooses to enroll an account with a balance less than $1,000, client does so at their sole discretion.

      Doesn’t an account of $10,000 accrue higher amounts of interest than an account of $1,000. It is also interesting to note they made the comment about the account being four months behind makes it a preferential debt. I wonder if the approach is not to settle the other accounts until they are four months behind as well?

    Termination. Either party may terminate this Agreement upon 5 days written notice to the other party.

    No mention of a refund policy yet but the client can be terminated for any reason from the program by EDS. Hum.

    1. Everest Debt Solutions may immediately terminate this Agreement if Client fails to timely return documents, fails to timely respond to Everest Debt Solutions, fails to set aside money in accordance with the fund transfer schedule or fails to pay a Service Fee when due. There is a $75 processing fee for cancellations after 7 days and prior to the date of the first payment.

    2. Client will be terminated from program immediately if found to have charged or continued to have charged on any credit card, personal loan, or debt entered into the program on or after entering the debt settlement program.

      I understand that might making settling the debt a bit tougher but why so harsh. If a client has a scheduled charge hit one of the included cards then the client can be terminated from the entire program and not get a refund of any fees? Doesn’t sound reasonable to me.

  7. Indemnity. Client agrees to indemnify and defend Everest Debt Solutions for any liability or claims arising out of the Agreement or the services requested.

    So if EDS does anything wrong as a result of this agreement you are agreeing to pay their legal fees. Indemnification is a standard contract terms but it seems like there is such liability and exposure here for both EDS and the client that it could create an event where the client would have to pay, probably as a pool of clients, for EDS to defend the claim.

  8. Arbitration/Statue of Limitations. All disputes or claims between the parties related to this Agreement shall be submitted to binding arbitration in accordance with the rules of American Arbitration Association. Any arbitration proceedings brought by Client shall take place in Hillsborough County, Florida. Judgment upon the decision of the arbitrator may be entered into any court having jurisdiction. Everest Debt Solutions is responsible for the full payment of the filing fee and the costs of the arbitrator as required by the American Arbitration Association. However, all other expenses of the arbitration shall be borne equally by the parties and each party is responsible for their own attorney fees and costs. Any claim brought pursuant to this agreement must be filed within one (1) year from the date claim or dispute arose.
  9. Choice of Law. The laws of the state of Florida will govern this Agreement without regard to the conflict of law provision therof.

    These sections are here for the convenience of EDS. If any issue or situation arose they want to fight it on local turf and use their local attorney to deal with it. Cheaper than them having to chase things all around the country.

  10. Integration. This Agreement and the Fund Transfer/Payment Schedules are the complete and exclusive statement of the agreement and supersedes any proposal, prior agreement, or or written, and any other communications relating to the settlement of debt.

    So it does not matter what the website says or the sales person on the phone might have stated or promised. This agreement is what they are actually agreeing to deliver and as you’ve seen, a lot of that seems uncertain and bad.

  11. Amendment. This Agreement may not be changed, amended, terminated, rescinded or discharged, except by a writing executed by the parties hereto, except as provided in Paragraph 3 above relating to NSF’s and reschedules, and no waiver of any provisions or conditions of this Agreement or any of the rights of a party hereto shall be effective or binding unless such waiver shall be in writing and signed by the party claimed to have been given such waiver.

    Once you sign this you can change the agreement unless EDS agrees to the changes.

    1. Severability. If any of the above provisions are held to be invalid or unenforceable, the remaining provisions will not be affected.
  12. If Client’s creditor settles Client’s debt for $600 or more than Client owed, the savings may be reported by Client’s creditor to the IRS as Discharge of Indebtedness income. Client may wish to consult a tax advisor to determine whether Client’s individual circumstances may permit Client to exclude any such Discharge of Indebtedness Income from Client’s reportable due to insolvency. For more information on tax ramifications to Client personally you may also wish to consult a CPA or Tax Attorney and to refer to the IRS website www.ustreas.irs.gov IRS Publication 908 – “Bankruptcy Tax Guide” and IRS Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness available on the IRS website.

    By settling debt you open yourself up to a potential tax bill from the IRS. It is important that people clearly understand this before launching into debt settlement. Any amount of debt forgiven or $600 or more must be reported to the IRS on a 100-C form by the creditor. The section above was just not clear about that.

  13. Limitation and Exclusion of Damages. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INCIDENTAL, SPECIAL, INDIRECT, EXEMPLARY, OR CONSEQUENTIAL DAMAGES ARISING FROM THIS AGREEMENT OF THE PROVISION OF THE SERVICE, EVEN IF A PARTY HAS BEEN NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. THE OTHER PARTIES ACKNOWLEDGE THAT THE OTHER PORTIONS OF THIS AGREEMENT HAVE BEEN MADE IN RELIANCE OF THIS SECTION.
  14. Notice of Cancellation. CLIENT MAY CANCEL THIS AGREEMENT WITHOUT PENALTY OR OBLIGATION AT ANY TIME BEFORE MIDNIGHT OF THE SEVENTH BUSINESS DAY AFTER CLIENT HAS SIGNED THE AGREEMENT. IN ORDER TO CANCEL, CLIENT MUST PROVIDE TIMELY WRITTEN NOTICE TO COMPANY.

A Review of the Everest Debt Solutions Debt Settlement Client Agreement
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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.
  • Jamie

    Do you know anything about J. Hass or Consumer Debt Counceling Group? I am in a similar situation as others and have just signed an agreement. I asked my contact to suspend the agreement because I found a report on BBB for J. Hass assigning them an “F,” and they have had 81 (resolved) complaints. I really need to do something – I cannot make upcoming payments. I do not want to make my situation worse, however.

    • http://GetOutOfDebt.org Steve Rhode

      Jamie,

      If you can’t keep making payments and you want to avoid collection activity and lawsuits by creditors you should contact a local bankruptcy attorney and talk to them about bankruptcy before you jump at any other solution. It does not sound like credit counseling would be appropriate in your situation and it does not sound like you have a lot of money on hand to offer settlements to creditors right now.

      I’ll add the J. Hass Group to my list to review.

      Steve

  • tonya

    Personally, I have out a payday loan-bad IDEA-I know. It was for $300.00 and I have paid $990.00. I have sent them a letter to stop deducting the monies and explained the District of columbia laws to them. If you do not have a money lenders license in DC, you are in violation of consumer lending laws/Payday Act. I should not make general statements but this company is not defending themselves at all. So, what’s a girl to think? Why not just respond to my letter and be done with the customer inquiry.

    • http://GetOutOfDebt.org Steve Rhode

      Tonya,

      It sounds like you are smart enough to read between the lines. You might want to fill out the appropriate forms with your bank to stop the ACH deduction as well.

      Steve

  • tonya

    Thank you for this article. Does anyone know if this company is related to Everest Cash Advance.com? If they are, these are crooks. If there is a relationship, I would like to know their address because you cannot find anything on this Everest Cash advance.com. I also ask because the logo of the blue mountain peaks are the same. This company does not list an address, only a an email and 800 number. thank you for anyone who can assist.

    • http://GetOutOfDebt.org Steve Rhode

      Tonya,

      I could not find any quick evidence that Everest Cash Advance or Everest Debt Solutions are part of the same company. It doesn’t mean they are not, just that I could not find a common bond.

      Why do you say they are crooks?

      Steve

  • Got out

    We paid them their fees that were about 4,000 and about 2100 in our GCS bank account that I don’t know if we will get back, we are waiting to see if it shows up like they said it would.

    • http://GetOutOfDebt.org Steve Rhode

      So what did they do for you for $4,000?

      Steve

  • Got out

    We cancelled our agreement with EDS and have settled almost all our debt on our own in a very short amount of time. We took a hardship on my husband’s 401K, which may not have been smart, but saved us from bankruptcy and we have settled two cards at 40% and one at 50%. I can’t believe how easy and nice the collection agencies were to work with. One of them even told us not to settle for 40% a lot of companies are setteling at 30% because it is better than getting nothing in a bankruptcy. He even asked if EDS had told us that that company didn’t work with debt settlement companies and the collection agency was told not to even speak with them. When we cancelled our EDS they didn’t really even ask any questions, just said to email or fax that we were quitting, didn’t even try to resolve any issues. I’m so glad we are done. I don’t know if it would have helped right away to call the credit card companies, but I wish we would have tried and saved ourself the fees that EDS charged.

    Thanks for your help!

    • http://GetOutOfDebt.org Steve Rhode

      So how much had you paid EDS?

      Steve

  • SDSantiago

    Thank you so much for this. Currently drowning on about $16,500 of credit card debt. With our first baby on the way my mind went into desperate mode. I’m thrilled to have found your forum and I can honestly say it has saved me a lot of headaches and heartaches. As we speak I am replying to an email that EDS sent me which included this very same agreement. I am declining of course. But the timing was impecable. Thank you Steve. Now to try and figure out what to do next…

    • http://GetOutOfDebt.org Steve Rhode

      I’m glad I was able to help you in some small way. It is quite a coincidence that you just happen to have received the same client agreement so shortly after I reviewed it. My review was intended to point out areas that needed clarification or led to additional questions. And from that my hope was that it would help to decipher some of tis fairly standard agreement stuff and give the company the opportunity to respond to help provide some transparency, explanation or enlightenment.

      If you asked the company any of the questions I raised, I’d like to hear how they responded.

      Steve

  • Thom

    LOL — I am still reading this — you have outdone yourself. All that keeps popping in my mind is that you will be contacted by their council any moment now.

    • http://GetOutOfDebt.org Steve Rhode

      Thom,

      Excellent, maybe they can finally give me some answers to my questions and clarify some points I raised in my review.

      Steve

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