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Home > Ask The Get Out of Debt Experts > I Talked to Wites & Kapetan and Impact Debt Solutions But Not Sure What to Do? – Sean

I Talked to Wites & Kapetan and Impact Debt Solutions But Not Sure What to Do? – Sean

“Dear Steve,

I have two issues that are nw affecting my debt. The first one is that I accumilated roughly 60k in debt due to a lenthy divorce in which I was left with one my childs medical bills along with the financial responsibilty of both childrens future medical exspenses. This along with having to rebuild a home for them and myself, having left everything with former spouse. I have also had some serious medical expenses myself. Secondly I have recently married a young lady who took on the debt from her former marriage just to get out and shortly there after she lost her job leaving her stranded financially. Thus the total is roughly 100k. The only payments being made were those towards my debt although they were the minimal amount they were being made and on time.

I have been approached by two different companies to assist. The first is a debt consolidation company Impact Debt Solutions and they indicate that in 4 yrs and at $1300.00 a month my debt will be resolved, but obivously not my credit rating. The second is Wites & Kapetan, P.A. here in Florida. They indicate that at $1500.00 a month in 4 years I will see the same results but with legal reprsentation if needed. What are my options I need assistance I am not a deadbeat but I have NO financial breathing room at all. Can you assist?

Sean”

The Answer

Dear Sean,

Get Out of Debt Free Hotline

Let’s take this in stages. The first step is some homework for you. I to click here to find a local bankruptcy attorney and talk to them about your situation. Once you do, come back and post an update in the comments section and let’s then chat about the overall situation, your goals, and how we can achieve that.

Please post your responses and follow-up messages to me on this in the comments section below.

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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.
  • SmartEnough80

    Mr. Day, I think you ask a LOT of person questions about finance. And I think filing Bankruptcy is mentioned WAY too many times as a solution!!! It’s best to just do your own research everyone because it seems these “professionals” have their own agenda as well.

    • http://DamonDay.com/ Damon Day

      Oh, that is right, it is much better to just talk to a debt settlement sales person and take his word for it that he is giving you the best option. How silly of me to suggest that a consumer look into additional options and get more information before making a decision.

      You are right I have an agenda. It is to make sure people don’t fall victim to sales pitches for bullshit programs that are simply going to make their situation worse. The only people ever complaining about my advice are the ones pushing the bullshit programs.

      Go figure huh.

  • Damon Day

    Hello Sean,
    The problem is that they can tell you anything during the sales call, but nobody has a crystal ball and can tell you what a bank may or may not do 3 or 4 years from now. Heck they can’t even tell you for sure what the banks will do next month. It is a sales tactic to give you a false sense of security that what they have developed for you is the actual circumstances that will play out.

    It sounds like you have a lot of future uncertainty in your life and the most important thing is to make sure you are planning for that first before the credit cards. I would certainly cancel your contract before your first draft. You have plenty of time to figure everything out before you have to make any decisions. You can always sign up in their program at a later date, although I doubt you will once you fully understand why a 4 year debt settlement plan is not likely to end favorably for you. It is a lot easier to stop the plan before they take your draft than it is to try and get it back from them after they have it.

    I would stay away from most debt settlement law firms. Since the new fee ban there has been a big push to sell law firm models as a loop hole to allow them to continue collecting their fees upfront. They will lay on the legal representation jazz, which most of them don’t actually do, but don’t forget, they are there to sell you their debt settlement program not to figure out what you should be doing.

    The best thing for you to do is not commit to any program right now, take a step back, meet with a BK attorney as Steve mentioned, just so you know what that would be like if you decided to file. If it were me, I would cancel the settlement agreement and then put together a financial plan that will actually make sense given your current and projected future circumstances. The credit cards are likely not the top priority. When is the first draft scheduled for?

    http://getoutofdebt.org/Damon-

  • Sean

    Impact stated that the payment was based on $.40 per dollar settlement which I qoute they stated “was high they generally see $.27 to $.35 on the dollar”. They did indicate to stop making payments asap so that the companies believe that you are going to fil bankruptcy. They then “will get in contact with the collection agencies to work on the debt resolution.” I have never been late on a payment nor have I ever defaulted on a payment until this time. I had signed up with them but nothing has been done in regards to payments. Since this time I have had emergency surgery creating more debt and I am already a disabled Veteran and currently as a result of my disabilities run the risk of loosing my job. I have been planning to cancel with this company. This past Friday I recieved a piece of mail from the law firm mentioned above and actually spoke with rep. The rep indicated that they deal directly with the credit card companies in reaching a settlement while at the same time collecting the payments froim the client, they also indicated that they will represent the client in a law suit. I prob have made a terrible mistake in my time of desperation but I did not know what else to do….

  • Damon Day

    Hello Sean,
    The problem is that neither of these two settlement companies seem to be actually representing to you what settlement actually is. There is no such thing as monthly payments with debt settlement. They may be presenting this as 1300 to 1500 easy monthly payments for four years, but that is not true. During this time your creditors are not getting paid and you are in breach of the agreement. The truth is that settlement can make sense in certain situations, but the answer is not low monthly payments over many years. That is a great way to get sued, but not a great way to get out of debt.

    If they are presenting their solution in the way you have described it, then I would stay away from them.

    http://getoutofdebt.org/Damon-

  • http://DamonDay.com Damon Day

    Hello Sean,
    The problem is that neither of these two settlement companies seem to be actually representing to you what settlement actually is. There is no such thing as monthly payments with debt settlement. They may be presenting this as 1300 to 1500 easy monthly payments for four years, but that is not true. During this time your creditors are not getting paid and you are in breach of the agreement. The truth is that settlement can make sense in certain situations, but the answer is not low monthly payments over many years. That is a great way to get sued, but not a great way to get out of debt.

    If they are presenting their solution in the way you have described it, then I would stay away from them.

    http://getoutofdebt.org/Damon-Day

    • Sean

      Impact stated that the payment was based on $.40 per dollar settlement which I qoute they stated “was high they generally see $.27 to $.35 on the dollar”. They did indicate to stop making payments asap so that the companies believe that you are going to fil bankruptcy. They then “will get in contact with the collection agencies to work on the debt resolution.” I have never been late on a payment nor have I ever defaulted on a payment until this time. I had signed up with them but nothing has been done in regards to payments. Since this time I have had emergency surgery creating more debt and I am already a disabled Veteran and currently as a result of my disabilities run the risk of loosing my job. I have been planning to cancel with this company. This past Friday I recieved a piece of mail from the law firm mentioned above and actually spoke with rep. The rep indicated that they deal directly with the credit card companies in reaching a settlement while at the same time collecting the payments froim the client, they also indicated that they will represent the client in a law suit. I prob have made a terrible mistake in my time of desperation but I did not know what else to do….

      • http://DamonDay.com Damon Day

        Hello Sean,
        The problem is that they can tell you anything during the sales call, but nobody has a crystal ball and can tell you what a bank may or may not do 3 or 4 years from now. Heck they can’t even tell you for sure what the banks will do next month. It is a sales tactic to give you a false sense of security that what they have developed for you is the actual circumstances that will play out.

        It sounds like you have a lot of future uncertainty in your life and the most important thing is to make sure you are planning for that first before the credit cards. I would certainly cancel your contract before your first draft. You have plenty of time to figure everything out before you have to make any decisions. You can always sign up in their program at a later date, although I doubt you will once you fully understand why a 4 year debt settlement plan is not likely to end favorably for you. It is a lot easier to stop the plan before they take your draft than it is to try and get it back from them after they have it.

        I would stay away from most debt settlement law firms. Since the new fee ban there has been a big push to sell law firm models as a loop hole to allow them to continue collecting their fees upfront. They will lay on the legal representation jazz, which most of them don’t actually do, but don’t forget, they are there to sell you their debt settlement program not to figure out what you should be doing.

        The best thing for you to do is not commit to any program right now, take a step back, meet with a BK attorney as Steve mentioned, just so you know what that would be like if you decided to file. If it were me, I would cancel the settlement agreement and then put together a financial plan that will actually make sense given your current and projected future circumstances. The credit cards are likely not the top priority. When is the first draft scheduled for?

        http://getoutofdebt.org/Damon-Day

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