Debt Interviews Debt Relief Industry

Northeast Settlement Group – Small But Transparent

Recently I was contacted by Andy Faria of Northeast Settlement Group. He wanted to share with me the approach of his debt settlement company and their approach of basing their fees on the actual performance of his settling debts instead of collecting large fees up front.

While his company is small he is able to provide help and assistance to consumers on a contingency fee basis. The larger debt settlement companies say doing this is impossible, but yet here is an example of a company that is.

So let’s get the basic information out of the way.

Northeast Settlement Group, LLC is located at 320 West Main Street, Norton, MA 02766 and the company was formed on January 26, 2009. Andy Faria is the managing partner of the entity and his cousin, John Faria, is the other partner. Andy says that as of right now they have five other staff members as well.

The website of the company is settleshort.com and their telephone number is 866-794-1869.

They state they offer assistance in Connecticut, Massachusetts, Rhode Island, and New York. But according to Andy Faria 95% of the clients are in the Massachusetts and Rhode Island area.

My Interview With Northeast Settlement Group

I had the opportunity to speak with Andy Faria from Northeast Settlement Group and we talked not only about his company but also about some of the positions put forward by TASC and USOBA saying that the debt settlement industry needs to remain as an advance fee industry where consumers pay years in advance for services they may never receive.

Andy’s position is that it is ridiculous for debt settlement companies to claim consumers would be harmed if they were being charged when settlements are actually agreed to and creditors would be a lot more willing to work with contingency fee debt settlement companies even though the debt settlement trade try to persuade people they would not. Andy speaks out that those positions by other debt settlement companies and says they make no real sense.

We talk about how long people should be in a debt settlement program and Andy feels nobody should be in a debt settlement program for three years. The shorter the better in a debt settlement program he feels.

Andy talks about why debt settlement companies need to move towards a model where they are earning their fee on a contingency basis and he also believes that debt settlement companies who will survive industry regulation need to ditch the big advance fee model as quickly as possible.

You can listen to my interview with Andy Faria below.

Northeast Settlement Group Wants to be a Good Guy in a Troubled Field

Andy and his Northeast Settlement Group want to show consumers they are good players in an otherwise troubled industry. He has embraced my call for transparent in the debt settlement industry, which you can read here.

Here are the answers to my transparency questions as given to me by Northeast Settlement Group.

  1. Debt Settlement Program Fee Structure
    • SettleShort Elite Program:

      The client will be charged a monthly service or maintenance fee of $25/mo for account handling and documentation processing. All clients will be offered the use of a Notworld Reserve Account, the monthly fee for this is $12.50. Our program fees are collected when debts are settled and paid, for example, when a settlement is established with a creditor the funds are allocated from their Noteworld account to settle the debt as well as our service fee. We will charge 20% of the amount we have saved the consumer/client spread evenly over the following 3‐6 months.

      Example: A consumer has a $10,000.00 credit card debt and we arrange a settlement of $3,500.00. We have saved the consumer $6,500.00 of that debt. Our service fee is 20% of $6,500 which equals $1,300.00. Both the payment to creditor and NESG will be furnished through the consumers Noteworld reserve account, the total cost to settle the original balance of $10,000.00 would be $4,800.00 (48% settlement).

      The monthly payment is calculated based the following criteria;
      Amount of enrolled debt
      Desired length of program

      The monthly reserve payment is calculated utilizing this formula;
      Total Enrolled Debt x .55 (55%) / Months in Program = Monthly Payment

      Example: A consumer has $40,000.00 in “Total Enrolled Debt”, 55% of that figure is $22,000.00 divided by the program length (let’s assume they desire a 3 year program which would be $22,000.00 divided by 36 months) which would equal a total monthly payment of $611.11, $25.00/mo. of which would be collected as our maintenance fee. This would give the consumer a reserve deposit of $586.11/mo. throughout our program which would over time, accumulate a significant amount of reserve funds to allocate towards future settlements creating the ability to establish these settlements in far less time than a conventional settlement program where service fees are collected on a monthly basis.

      1 YR Program: (Total Enrolled Debt *0.55)/12 [MONTHS IN PROGRAM] +25 [MAINTENANCE FEE]
      2 YR Program: (Total Enrolled Debt *0.55)/24 [MONTHS IN PROGRAM] +25 [MAINTENANCE FEE]
      3 YR Program: (Total Enrolled Debt *0.55)/36 [MONTHS IN PROGRAM] +25 [MAINTENANCE FEE]
      4 YR Program: (Total Enrolled Debt *0.55)/48 [MONTHS IN PROGRAM] +25 [MAINTENANCE FEE]

    • Settleshort Green Light Program:

      Customer agrees to pay Northeast Settlement Group a program fee equal to 15% of the savings
      amount, of each enrolled debt. The program fee will be charged to the CUSTOMER as settlements of 50% or lower are reached with each creditor. Any settlement offers above 50% can be refused by the CUSTOMER and Northeast Settlement Group will continue to work until a settlement of 50% or less is obtained. Any settlements obtained at 50% or lower will be considered complete and it will be the responsibility of the CUSTOMER to meet all terms set forth in the creditors settlement offer. It is expected that CUSTOMER will maintain the availability to funds to cover at least 50% of total remaining enrolled debts at all times until all enrolled debts are satisfied. If CUSTOMER fails to meet the creditors’ settlement agreement and the need arises for Northeast Settlement Group to renegotiate the terms, this enrolled debts fees will be charged again. A $500 Retainer will be charged upon our completion of submitting all the initial settlement offers to all creditors.. This Retainer is non refundable.

  2. Debt settlement program terms and conditions

    Here are sample representative copies of the program terms and conditions.

  3. Ongoing success rate of past clients that settled only some debt:

    We have had less than 8% of our clients drop out of the program. All of them except for 1 were within the first 1‐3 months and granted full refunds for any fees collected. Most of them had a sudden change in income/expenses, or a change of plans and our program no longer made sense for them. We parted ways amicably with all of them and still maintain contact with many. We are in regular monthly contact with our clients and always return messages the very same day. Our negotiator is monitoring daily, all clients reserves and regularly opens contact with creditors even when the possibility of settlement may be months away. We have been able to successfully establish many long term settlements much earlier in the game than if we waited for the entire amount of reserves to build.

    We also request that our clients forward any notices from their creditors in regards to complaints, law suits, or if the debt simply changes hands to an outside collector. Our policy here is to call on any debt immediately and open some kind of communication with them. I don’t have exact data yet(in an easy to read format that shows up to the second progress), but it’s a great idea. We have the data and will be creating a report from our CRM asap, I feel it will be a great tool to monitor our progress in one place. It may take a few days but I would be glad to provide you with that report when completed.

  4. Ongoing success rate of past clients that settled all debt:

    In our first year in business we have only had 1 client so far that now has a zero debt balance. He was our very first client and he took a very proactive part in the process. Together over 11 months we were able to reach agreements on all of his accounts totaling $114,000. His total paid will be $47,222 (42.3% overall). He still has about 10 months to go on two accounts that we established 12 month term settlements for him with Chase and AMEX, after those he will be done. This particular client was with us for 11 months and he was on the old fee structure, so he paid $200/mo ($2200 total). He is now on his own and no longer being charged any fees.

  5. Average length of time in the program:

    The average established program length for our clients is 34 months. [We will have to see on this statement since they are not aged enough to make an exact measurement.]

  6. Settlement Information:

    Total Amount Settled: $121,366.37
    Total Settled Accounts: 40 Accounts
    Average settlement amount: $4860.20
    Average Settlement Percentage: 40.42%

  7. Customer satisfaction data:

    We handle our clients from start to finish, every aspect of the entire debt settlement process. We would never even consider sending our clients off to a back end. With this in mind we go way above and beyond in explaining every negative aspect that debt settlement presents (secret shopping calls welcomed). We will be working with each client from start to finish; it does us no good not to disclose everything. In addition, every single potential client is made aware of any and all options available to them (credit counseling, BK, etc) and we actually advise them to actively investigate those options before enrolling with us.

    We have 2 sales/consultant staff and 5 back end staff to service our clients. We return all calls
    the same day and any problems or issues that arise are always handled in house. We have NO
    complaints with BBB or any other agency or organization. Our theory is that we would rather
    grant a full refund to clients if an issue is so great that it can’t be worked out. Even if they are
    being completely unreasonable, it’s just easier that way.

  8. Percentage of clients that were sued for a debt that was included in the program.

    We currently have 189 enrolled accounts still unsettled. Of those we have 18 of them we have marked “legal”. That would leave the “percentage in legal status” at 9.5%.

    We instruct any of our clients to immediately send us any complaints, lawsuits or notice that the
    debt is transferring to a law firm or collector. Our policy is to call these new creditors or law
    firms immediately. We find many times we will be able to reach an agreement before a lawsuit
    progresses.

    We currently have 2 clients with court dates. One is in the end of July and the other is for late
    September. Those accounts are currently on a weekly follow up at minimum and we are working
    hard to reach an agreement before court is required. In the event that they do go to court, both
    clients have been advised of their need for proper legal consultation or representation. Any
    enrolled accounts in “legal status” are handled in this manner.

  9. Percentage of clients that continue to get collection calls while in the program.

    This one is almost impossible to calculate accurately. If I had to guess I would say 90‐100% of our clients still receive collection attempts of some sort. We do our best to have creditor calls directed to us, but it’s impossible to stop every call. Every client understands this completely before signing up for either debt program we offer. The pitch that debt settlement will stop collection calls is not true.

  10. Reason why clients left the program before settling all debts, broken into category.

    We have had 2 clients leave the program because they decided to file Bankruptcy. Another client had lost their job and wouldn’t be able to maintain their monthly payment towards settlement. Two other clients left because they had heard negative information about debt settlement and
    decided to go in another direction. The last client that left, did so after 6 mos in the program and
    we were able to settle 1 account for him in that time, saving him $954. I don’t really know why
    he left, he never fully explained why.

Photos From Northeast Settlement Group

I really enjoyed the photos Andy from Northeast Settlement Group sent me. They brought back a lot of old memories for me from when I first started the credit counseling company in 1994. It’s nice to see them using the same old inexpensive furniture, dividers and desks.

Although I’m not sure they have the same problem we did of truckers on CB radios passing the office and cutting in on telephone conversations.

A review of the Northeast Settlement Group Web Site

Overall I’d have to give their web site a thumbs up over the disclosures that are made on 90% of other debt settlement sites. Here are some of the things they say on their debt settlement page. How refreshing.

  • Good Stuff on the Site

    All you need to do is Google the term debt settlement and you will find story after story of people getting burned by debt settlement companies. Most of it is true and a direct result of the debt settlement companies charging the majority of their fees upfront or over the first 6-12 months. Many times the fee is paid in full and nothing substantial has been done.

    We don’t believe that charging large upfront fees is fair or ethical and we don’t charge them. We offer two separate debt settlement programs and with both, fees are charged when an account is settled and always based on our performance. If we don’t perform, we don’t get paid.

    The negative press that the debt settlement industry has received lately has been caused by more than companies just charging high upfront fees. Not disclosing the many downsides to debt settlement can leave consumers getting blind-sided by growing balances, collections calls, and even lawsuits. For some, debt settlement makes perfect sense, while for others it would be far better off dealing with their debt with a different approach.

    As mentioned at the top of this page our goal here is to provide you all of the facts, so you can make an informed decision. Most websites related to debt settlement will have all the benefits in giant font, sometimes flashing and sometimes racing across the screen. The disclosures, downsides, and fees are typically all the way at the bottom of the page in a very tiny font. We’ll make it easy for you, we’ll keep the font the same size and we’ll explain as many myths and disclosures to the debt settlement process as we can.

    Debt Settlement Myths

    • “We can stop all collection calls” – No they can’t. It’s impossible to stop all collection attempts. Part of our written correspondence to your creditors requests they contact us with their collection attempts and not to contact you. The creditors many times ignore these, and you may still receive calls from them. We can resend the correspondence as many times as needed if a creditor is being overly aggressive or persistent.
    • “A government bailout program has made this all possible” – No it hasn’t. This one is total BS, and you should RUN from any company that offers this as a credible reason for enrolling in their program. No such government programs exist and the person you are speaking with is either completely misinformed or a blatant fraud.
    • “You’re protected because we’re part of an official organization” – The debt settlement industry has two major “associations”. TASC and USOBA. Any member of either of these organizations will tell you it’s a badge of honor and you should always try to work with a member affiliate. The truth is that neither of these organizations offers the consumers very much in the way of real protection, many of the worst offenders in the debt settlement industry are members of these organizations. In our opinion both of these organizations currently represent the best interests of the debt settlement companies, not the consumers. Until one of these organizations steps up to the plate and offers real consumer protection in the form of a limit to upfront fees, we will not be affiliated with either.
    • “Getting out of debt is easy” – This couldn’t be further from the truth. For many, being delinquent on any account can be a shock to the system. You will go into the creditor’s normal collection process and will be subject to all the normal collection attempts. We will help to smooth out the ups and downs to the debt settlement process, but it still won’t be easy.
    • “We’re a law firm, so we have an advantage” – You certainly won’t have any advantage or gain any leverage working with a law firm, but you will most likely pay higher fees. Most of the time an actual lawyer will never make any calls on any of your accounts, they are just using their name in order to sell more and charge higher fees. They won’t represent you in court, and their fee structures can be the worst in the entire debt settlement industry. Doesn’t sound much like an advantage to us.

    Debt Settlement Disclosures

    • Credit Score – A debt settlement program will most likely have a negative effect on your credit score. How much your credit score will drop will be determined by how your credit score is right now. If you have been behind on your debts for a while already, your credit score may not be affected as much. If you have a great payment history and good credit score when you enroll in a debt settlement program, your credit score will likely plummet. A debt settlement program is NOT designed to improve your credit; it is a strategy to eliminate your debt as fast as possible and for as little as possible. Maintaining a solid payment history with all of your creditors is the only way to improve your credit.
    • Balances can grow – When you fall behind on credit accounts, there may be late fees or interest charged until the accounts are settled and your creditors are under no obligation to reduce the balance owed.
    • Lawsuits – Creditors have the right to sue in order to collect their debts. Each creditor has their own rules and policies as to whether or not it will follow through with a lawsuit, and these policies seem to be constantly changing. The only sure way to prevent a creditor from suing is to settle the account before they decide to take legal action. The fact always remains that a creditor exercising their right to sue is a possibility and if you are sued or taken to arbitration it is important you get legal advice and follow it concerning how to respond to the statements in court or arbitration claim. In our experience any time somebody failed to respond correctly to a lawsuit or complaint, a judgment was automatically entered for the creditor.
    • Income Taxes – Another thing to be aware of with any debt settlement process is that it may have an effect on your personal income taxes. If the amount of forgiven debt exceeds $600, your creditors must report it to the IRS on a form 1099C as “Forgiveness of Indebtedness Income”. According to information on the IRS website this income can be excluded from your income tax under certain conditions such as if you were insolvent at the time the debt was settled. We always recommend using a tax professional to help with your tax returns while involved in a debt settlement program.
    • Income – In order to be successful with any debt settlement program you must be able to maintain a steady source of income. The goal should never be to stretch out a debt settlement program as long as possible; it only increases your exposure to all of the dangers above. A debt settlement program should never last beyond 36 months, you may be a better candidate for bankruptcy or credit counseling/consolidation if you need longer than that build the sufficient reserves. – Source
  • Stuff That Could Use Some Improvement

    The FAQ page made me wince when reading the statements about bankruptcy.

    Q. What is better, debt settlement or bankruptcy?
    A. Many people struggling with debt consider bankruptcy. The main disadvantage of bankruptcy if compared to debt settlement is that it will damage your credit history and score so bad that you won’t be able to get any new loans for up to 7-10 years from the moment you file it! As opposed to that, a good debt settlement program will be able to settle your debts for a tiny fraction of their outstanding amount without letting the creditors make your credit history any worse. The second point is that debt settlement doesn’t take as much time and effort as the process of filing for bankruptcy. And last but not least, with the new bankruptcy laws, you will most likely be forced into a Chapter 13 repayment plan instead of being allowed to file Chapter 7 bankruptcy, which means that in the following years you won’t be able to spend money on anything but necessities. Doesn’t sound very tempting, right? – Source

    I find that particular section to not be representative of bankruptcy. In fact, falling behind on your debts in a debt settlement program will be reported for seven years as well as a Chapter 13 bankruptcy.

    People that go bankrupt and rebuild their credit will be able to get loans within a couple of years and will get offers for new credit immediately after the discharge of their bankruptcy.

    The “tiny fraction” statement is a bit over the top for me, even an actual settlement near half, which is their actual percentage is not a “tiny fraction”.

    The statement “without letting the creditors make your credit history any worse” seems inaccurate since the delinquent debt in the debt settlement program will be reported on the credit report and the debt settlement company has no control over what the creditors must report.

    People that opt for bankruptcy, 70%+ file under a Chapter 7 bankruptcy that discharges their total debt in months. The remaining people file under a Chapter 13 bankruptcy and repay their debt over three to five years based on what they can afford.

    The section also fails to mention the advantages of bankruptcy to give consumers a clear understanding what they are comparing. Bankruptcy will stop all collection calls quickly, will prevent lawsuits, will terminate and wage garnishments and give consumers legal protection from their creditors.

    Q. Will my creditors still call me?
    A. Once you miss a couple payments your creditors may still contact you. As soon as you enroll into one of our Settlement Programs we will send a “cease and desist” letter to all your creditors and this usually takes care of 99% of the phone calls, but if they continue to call we will work with you and the creditor to get them to stop. – Source

    Ouch, that looks like it needs to be updated. By their own admission, “90‐100% of our clients still receive collection attempts of some sort.” That section looks like it needs to be updated in two ways. First, to reflect that most clients still do get collection calls and that a cease and desist letter has no power on the original creditor to stop calling, only third party collectors.

So…

So it looks like NortheastSettlement Group is trying to be one of the up and coming good guys. They have gone a long way to speak openly and honestly about the debt settlement industry and have provided their transparency numbers for all to see.

The issues I had a concern with on the FAQ page look like the standard messages you hear on most debt settlement sites that gloss over the reality of bankruptcy. I’m hopeful that once I point out these concerns to them they will update their FAQ page with more balanced information.

Since Andy and his crew have already started out under the contingency fee model and are enthusiastic to be paid for their actual performance and delivery of services, I’m sure they are poised to better survive upcoming debt settlement regulation.


I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

READ  Northeast Settlement Group Places Client Service Agreements Online



About the author

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.

33 Comments

  • First once again let me say I have nothing to do with the DS industry at all, no interest, vested or otherwise. For or against. I am very aware of what goes on in the Banking division in NY, as a matter of fact (according to my notes), my first conversation with regards to DS with the NY Bank division was on March 12th, 2008 @ 3:40 PM. (my guess is I was one of the first, b/c at that time they were completely clueless to the impact of the DS world).

    See when reading the law, just because the Banking division doesn’t feel they have jurisdiction over DS doesn’t mean an AG can’t make a case (and that’s the big worry). That statute was made prior to the word DS being used. And here’s what should make a DS company nervous under the definition:

    “has a contractual relationship with another person or entity that distributes, or supervises, coordinator or controls such distribution of, the same among certain specified creditors in accordance with a plan agreed upon and”

    Based on pure transparency a DS company absolutely supervises and or coordinates the distribution of funds (or at least they should). And the one place I told Jane she was absolutely wrong was in the risk of the funds. Again based on pure transparency, most, not all, but most DS companies have control over the funds, and these banks and companies involved in the aspect of funds are very suspect. As we saw with the Rocky Mtn Bank.

    So let me ask this, how are things working out in NY with Mr. Cuomo? I know, not well.

    And I also made the statement; “Amending a statute is something companies have to worry about when pushing for their own legislation. States don’t have to pass some type of UDMSA, they can simply amend the definition in current legislation to cover DS”

    And what did Ms Azia recommend? Exactly that. That would not be a good thing for most DS companies. Which goes back to my basic business 101, DS should have worked with the State first, rather than just gong ahead and operate as they did. Another problem that you see is major insurance carries will not write any type of liability, D&O insurance and are dropping companies.

    Again, I’m not interpreting anything, generally what business consultants do is simply this. My recommendation based on the possibility of having problems with the AG, with the way the current statute is written would be to license your company under the current statue then work directly with the State to make changes. But anyone can take their chances. Here would be some food for thought I would give a CEO deciding to take a chance in NY. Let’s assume for the sake of argument you get in a tangle with the AG and you loose. Three yrs from now based on current changes in the law on a national level your DS company goes under. Now you have to look for a new job. Do you really want to explain (or have on your record) charges from an AG that you lost? I would hope the answer would be “no, not really”. But then again there are many people on Wall St that have gone to jail, and criminal charges, I feel could be an actual concern in DS in the near future.

    • I hadn’t seen Steve’s post regarding the NY Judge prior to my above posting. So please read it without taking into account that NY Judge.

  • Phdoco,

    Your interpretation of NYS Article 28-B – (455 – 457) BUDGET PLANNING, when pertaining to the debt settlement industry is actually wrong. Debt Settlement Companies Are Currently Not Regulated under New York Law. Before make a statement do a full investigation and speak with law makers as I have.

    http://www.banking.state.ny.us/sp090514.htm

    “In contrast to budget planners, New York law currently does not regulate what are known as debt settlement companies. Debt settlement companies negotiate with a debtor’s creditor to settle the debt for a percentage less than the amount of principal owed. The consumer deposits and accumulates settlement funds and related fees, many of which are front-loaded, in a bank account the consumer personally controls. Settlement will not occur until the consumers has deposited and accumulated sufficient settlement funds and fees.
    Unlike budget planners, debt settlement companies do not receive or hold consumer funds for distribution. Rather, as noted, the consumer accumulates funds in a consumer controlled account. Therefore, consumer funds are not at risk for nonpayment by the debt settlement company. As a result, debt settlement companies are not regulated as budget planners, and there is no law that expressly prohibits or restricts their activities.”

    • Thomas-
      I agree- I am not a lawyer, however my experience says that laws are generally upheld at the highest levels to their intended subject. Most, if not all of the laws mentioned seem to have been written specifically in regard to Debt Management Companies- not Debt Settlement companies. Any lawyer COULD argue it either way but i don’t see any reason for such a thing, as the intention seems to be that they written for a dif purpose.
      Just my opinion.

      • Let’s be honest, there is no really difference b/w DM and DS, other then DS has made a few adjustments to try to avoid any regulation. Some states have similar statutes and have simply said those rules apply to DS and that’s that. Just happens Ms Azia thinks one way, but Mr. Cuomo thinks another way.

        I’ve honestly never seen an industry so opposed to having rules when it comes to consumers and finance. It’s mind boggling to me.

      • As I throw my arms up and address the audience “You see what I’m talking about people?”

        I’m not out to get anyone, I’m just very skilled in business and understand the possible outcomes and risks involved in business decisions. Now it’s too bad Debt Resolvers USA hadn’t consulted with me first.

        • What some of the readers fail to understand is that in the debt world, all customers are considered to be a disadvantaged class of consumers. If it comes down to an opportunistic debt settlement company or a harmed consumer, the debt settlement company is going to lose most, if not all, of the time.

          If there is anything to be learned from these comments it is that debt relief companies should always error on the extreme side of caution and compliance as to avoid all the bad stuff that is happening in the debt settlement world.

          Steve

  • LOL, no as I said before I don’t work in the DS industry (and I know those guys you’re talking about). I will give this post my two cents one final time, it’s wasn’t my intention to get involved in a consulting blog, but I’m always happy to inform people and be helpful if I can.

    In just about every state DS can fall under in some way shape or form in the definition of current statutes/laws (that’s not to say every state). Now some lawyers are paid good money to argue those definition, and I’ve rarely seen, if at all, a DS company win, regardless of the model they use (including the so called attorney model – if it walks like a duck, sounds like a duck, acts like a duck, it’s a duck). So they have a choice, they can either contact the powers to be at the state level and meet with them, be completely transparent of how they operate and find out whether or not the state agency believes they fall under that statute, or they can simply do what almost 100% of the industry does (even those companies that claim to be the good guys), deny that the laws are applicable to them, b/c the word DS is not spelled out and operate under the radar and hope they don’t get caught. You won’t get any real help from any of the associations, they’ll just pitch you a sales pitch so you get paying them (they are for-profit organizations). As a company owner you’ve got to put your big boy pants on and call the regulatory agencies yourself.

    In RI the UDMSA has been passed and you need a license, I’ve heard of some lawyers debating the MA law, and I don’t know what the outcome has been (I really had no interest in investigating the outcomes). And VT has enough case law from what I remember, and their opinion is what it is. Here is the VT definition (unless they’ve amended their statute or passed a form of the UDMSA).

    VT Definition:
    “Debt adjustment” means making a contract with a debtor whereby the debtor agrees to pay a sum or sums of money periodically and the other party to the contract distributes, supervises, coordinates, negotiates, or controls the distribution of such money or evidences thereof among one or more of the debtor’s creditors in full or partial payment of obligations of the debtor. For purposes of this chapter, engaging in debt adjustment in this state shall include:
    (1) soliciting debt adjustment business from within this state, whether by mail, by telephone, by electronic means, or by other means regardless of whether the debtor resides within this state or outside this state;
    (2) soliciting debt adjustment business with an individual residing in this state, whether by mail, by telephone, by electronic means, or by other means; or
    (3) entering into, or succeeding to, a debt adjustment contract with an individual residing in this state. [8 V.S.A. § 4861]

    Amending a statute is something companies have to worry about when pushing for their own legislation. States don’t have to pass some type of UDMSA, they can simply amend the definition in current legislation to cover DS (and some have done that).

    Happy 4th to all ! !

Leave a Comment

Scroll to Top