Performance Fee Debt Settlement Company, New Era, Comes Out Shining in Test

New Era Debt Solutions scored some MAJOR points with nationally syndicated columnist Terry Savage in an article published today.

Terry says she put New Era, a debt settlement company that collects most fees when the debt actually settles, to the test.

By strange coincidence that very same week, I received an e-mail from a man called Peter, who explained that he had roughly $27,000 in credit-card debt and couldn’t even make the minimum monthly payments. However, he was expecting a tax refund of approximately $10,000. Peter wanted my opinion on using a debt negotiation service.

I gave him my negative views and warnings, but I also remembered my recent conversation with Alex Viecco. Would he be interested in experimenting? I offered to put him in touch, while warning him of the dangers to his credit should the process go awry.

After discussing the process with New Era, Peter decided to go ahead with the debt negotiation program. With the permission of both, I followed the progress over the next few months. Of course, this wasn’t a fair test of the service, because the company knew that I would be monitoring the results.

The results were quite a surprise to me, to say the least.

Peter entered the program with $26,700 in debt on one credit card. He initially paid $800 as a retainer fee (of which, $400 was eventually returned to him).

New Era obtained a settlement that required Peter to pay only $7,185 to the card issuer, and an additional $3,605 in settlement fees, plus the $400 reduced deposit.

Peter saved — or, more accurately, avoided paying — $15,510. His credit report will show the debt as “settled for less than full balance.”

His reaction: “What a relief! I was fairly skeptical, and I know you were too,” he told me. “But the beauty of these guys was they didn’t take any money up front. It took them several months but they were right in saying that you have to wait a while to get a good settlement.”

So it worked for Peter — because he had the cash upfront to make a quick offer to the card issuer. – Source

The one thing the article did not mention is if Peter was left with a lingering tax liability from the forgiven debt.

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I’ve done similar debt settlements like this before when people have cash on hand. The key here is the client appears to have been well qualified and ready to settle as opposed to someone trying to save funds over a long period of time.

Congratulations New Era for the PR coup.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.


Damon Day - Pro Debt Coach

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10 thoughts on “Performance Fee Debt Settlement Company, New Era, Comes Out Shining in Test”

  1. You’re right. When this article was written, New Era Debt Solutions did charge a small up-front fee. For the past couple months we have charged no up-front fees and plan to continue with that model as we believe it’s the best for the consumer.

    Looking at this case specifically, even with the up-front fee this person still saved 58% AFTER paying the creditor and the fees.This is clearly an exceptional value, regardless of the client’s circumstance or fees we were able to collect. This is a win-win, which we always strive for. We try to find the clients that won’t represent a win-win during our underwriting process.

    In general, the problem with debt settlement is the fees for clients who do not actually receive any relief. There is a reason the FTC ruling didn’t include a fee cap, but instead forced the fees to be based on performance.

    Reply
  2. If you look at the article again you’ll see that the coup was the fact New Era had a nationally syndicated personal financial journalist write an article praising them.

    Are you saying that New Era does not collect most fees when the debt is settled as Terry Savage said?

    And for your statement that “Any debt settlement company could look like a champ if our clients came in with money.” I guess that’s the role of screening potential clients appropriately so you only enroll those most qualified for success rather than profit.

    Reply

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