Debt Settlement – The Tortoise and the Hare

This is a guest post by Michael Bovee from Consumer Recovery Network.

Damon Day - Pro Debt Coach

Debt Settlement – The Tortoise and the Hare

by Michael Bovee

Debt Settlement is certainly an effective approach to get from under a crushing amount of credit card debt – for the suitable candidate.

Over the years of working with consumers and assisting them to settle their debts, I long ago identified the need for consumers to recognize that they are in a race. As with any race, you enter to cross the finish line a winner. Most any race requires preparation, training and skill. You want to know as much about your opponents as possible and even test the track and become familiar with the course you will travel.

How to Measure Your Ability to Compete

Participants in the debt settlement race need to first identify if they should even enter.

Some of the methods to use in determining your suitability for debt settlement should weigh heavily on:

The balances on your credit card and other revolving debt and who your creditors are.

  • Each of your creditors has their own set policies, timing and percentage of balance targets when negotiating delinquent accounts. You will generally need to speak with a reliable source that is willing to share with you what your particular creditors typically do and when with regard to balance concessions. When you have this detail you can better target the next suitability measure;

Your immediate and near term needs and goals

  • Will you be able to budget your current and projected income, savings and cash flow to meet your basic needs and goals now and into the near future while meeting your time lines for settlement. Needs include your combined monthly bills and overhead if you had no credit card debt. Goals can be retirement, relocation etc…. This brings you to the money measure;

Your ability to tap funding sources now and over a projected period of time in order to pay the newly negotiated balance reduction

  • A dominant factor in determining whether settling with your banks is an appropriate option for you is how quickly you will be able to pay the settlements.

    There are flexibilities with funding of debt settlements that are missing from your other legitimate options such as credit counseling or chapter 13 bankruptcy. The flexibilities cannot be extended too far however.

You must settle as much debt as quickly as possible in order to mitigate the risks associated with not paying in order to reach settlements.

Your available savings, cash flow from income, resources you can advisedly tap in order to meet the settlement deals as they come in – can be mapped and projected over a given period of time. This is your measure of stamina that will set the pace for what type of race you run.


Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

The race track has some randomness. Some of the unpredictable attributes to the track will be due to life events that happen to you after the starting gun. Some will be obstacles that are thrown on the track from the other participants in the race (your creditors)!

If an account you planned on settling is placed with a local debt collection attorney, or you are sued on an account nearer the end of the race, you can still negotiate terms and reduction and finish the race a winner.
If an obstacle such as a lawsuit appears too early in the race, or multiple times throughout the course, you will either need to tap an emergency source of funds in order to hurdle this, or be forced to consider dropping out of the race entirely.


It is a huge benefit to work with a seasoned pro who knows the track and all of the other racers. At minimum you should discuss your situation with a pro who can help you measure your ability to enter and complete the race.
If your condition suggests your finances are too out of shape, at least you will know not to enter.

If your condition is up to stepping over the starting line, a pro will be able to assist you in passing the creditors you are racing against one after the other. Having that pro in your camp can make the difference in whether you pass the finish line or not.

Look to reputable professionals like members of the AACC who can assist you in running this race like the hare. You want to come out of the starting blocks at full speed and cross the finish line breathless.

Debt settlement is no place for a tortoise.

See also  The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, Bankruptcy, and Debt Consolidation Loans

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