Debt Relief Industry Forecasts and Trends Marketing

Debt Relief Providers to See General Slowdown Until Credit Loosens

As part of what I’m seeing out in the debt relief world, the demand for debt relief services in general is slowing for everybody in the debt relief space.

It’s been interesting to watch credit counseling blame debt settlement, and debt settlement blame bankruptcy and bankruptcy blame everyone for the lower demand for services.

I just posted an article on lower bankruptcy filings for the tail of 2010 from the year before and I expect to see filings, when compared for the same time period last year, drop.

Jay Fleishman, a bankruptcy attorney that helps other bankruptcy attorneys market their practices just told me “Lots of my consumer bankruptcy lawyer colleagues are in slowdown mode and have been for some time.” On Twitter (@JayFleishman) he said “Too many lawyers flooded the field when the recession hit. So now people are just broke and angry.”

This just reinforces what I’ve been saying.

My opinion is it’s time for good debt relief to stop sinking money into finding just those few consumers that match your niche solution and instead widen your solution base to serve all the consumers that contact you.

With a falling number of consumers that need bankruptcy, debt settlement, or credit counseling; trying to compete just for your niche client is only going to get more expensive since acquisition costs will remain steady or increase as the demand for the smaller audience of consumers who need X solution, falls.

The irony is that while many debt settlement companies are angry and blame regulation and the government for killing their industry, the fact is the shrinking demand for services was doing that already. Consumers that are stone broke don’t have money for repayment solutions. The most at risk solution to this slowdown is probably credit counseling that provides little to no monthly payment reduction.

Debt relief services will always be needed but until credit begins to loosen up and consumers start absorbing new debt, expect demand for debt relief help to only continue to trend downward.

Sincerly,
Steve

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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.

115 Comments

  • In my short time on this site all I ever hear is the same old rap from you Damon, everyone attacks Damon, poor Damon how can this be, he’s so much better than everyone else?

    I knew for sure you would try and skirt the answer to the first question and you made a good attempt at hedging yourself but at the end of the day you did not answer why you didn’t post the video to your site? That’s what this is all about Damon and you know it. I made a comment about the video, stuck to my guns, period.

    So let’s look at your answers, I will do what I did earlier and post my comment after your thought.

    Damon wrote;
    This is becoming amusing for me and a train wreck all at the same time. What is it that you think you are gaining here Mike? I am just curious.

    Ans, an understanding of Damon Day

    Ok, here are the answers to your questions. For someone who isn’t attacking me you certainly seem to be throwing a lot of questions at me and insisting on an answer. That is weird right?

    Ans, what’s weird is, you do it all the time and when the shoe is on the other foot it becomes an attack.

    A few of my criteria for recommending a debt settlement company?
    1. They have been in business at least 3 years and preferably 5.
    2. They were performance based even before the FTC required them to be so.
    3. They charge a fee that is much lower than the typical settlement company.
    4. They have a track record that shows clear results, little to no complaints.

    Debt settlement isn’t rocket science. If the company puts the client first, the rest is easy, providing you only bring on the right clients. Of course any client I tell to look at settlement is the right client, or I wouldn’t tell them to look at it.

    Those are some of the main things I look for. Keep in mind. I don’t tell a client who to hire. I just give them the names of companies that I know are good and have known of them for quite a while. Then they have a list of good companies that they can chose from, or chose a completely different company and ask me for my opinion. I won’t just give my opinion. I will also give the reasons for my opinion and they can decide if I make sense or if I am just full of it. The fact that I can get them a large discount with pretty much any debt settlement company just sweetens the deal for my client don’t you think?

    Ans, yes, all good answers, like debt settlement the same holds true for debt coaching, it’s the furthest thing from rocket science.

    How involved I am with a client after the initial consultation is up to the client. Some clients only have one consultation, others might want to have me available in the future. It is up to them.

    I don’t typically just point my clients in a specific direction and that is it. I use a process whereby we look at multiple scenarios based on various possible circumstances and work through various solutions with some if/then scenarios. The difference is, that I make sure my clients don’t get into anything that their current or likely future circumstances makes it unlikely they will be able to complete. If they lose their job and possibly have to file BK, there is nothing I can do about that, but I certainly will prepare them for that.

    Ans, so what this sounds like is, most of your clients once engaged in a service you recommend (unless they reach out to you) for the most part is not going to report success or failure, therefore in many cases you do not know the results or effects of your recommendations, correct?

    If you are willing to bet your “financial analysis” that you do for free is more insightful than what I do with my clients, how much are you prepared to lose? The facts are simple, you are spending a ton of money on this SEO campaign you are talking about. You make all or a bulk of your money when you sell your debt settlement program. In contrast, I spend 0 dollars on advertising, all of my clients are referrals, and I get paid specifically for providing good, unbiased information. I make the same amount of money regardless of what the client needs. Is it logical to think that you recommend debt settlement much more often than I do? You can answer that question, but the facts are, you would go out of business if you only recommended hiring a debt settlement company as often as I do.

    Ans, Damon, I can tell you for a fact that the majority of consumers we speak with through SEO are not as good a candidate for DS as compared to DM or BK, hense the other programs we offer however, when using data from the credit bureau’s the information is filtered in such ways that better defines the consumers condition providing us with higher pre-qualified candidates for DS, at the end of the day common sense and a deep financial analysis dictate the program or the lack thereof.

    There are times when hiring a debt settlement company is the best move for the client. There are also times when the client can clearly do it themselves. There are then other times where multiple solutions are possible, but knowing which one is the best will require a much more in depth understanding of the clients overall circumstances.

    I will let the consumer decide which one of us will do a better job covering that. The one that sells one of the options, or the one that sells none of them… Hmm lets think about this for bit.

    Ans, people buy carfax’s from the dealers all day long and still purchase cars from them. I think if you had every consumers ear that was in trouble you wouldn’t be playing here.

    Would you prefer to go to a fee based financial planner and pay for non incentivized advice. Or go get a free financial analysis where the planner makes money only on the loaded mutual funds and insurance that he recommends you need?

    Ans, Track record is everything so if im paying for advice I would expect a clear record of success by the majority and if the firm providing the advice could not produce it, I would think twice.

    Sorry, “facts is facts,” whether you agree with them or not.

    Ans, I agree completely provable facts are facts

    No sales pressure? That is great, glad to hear it. There is a difference between no sales pressure and professional bias. The facts are clear. Bankruptcy attorneys tend to recommend BK as the best solution more often than not, Debt settlement recommends debt settlement, CCCS recommends what they do. Whether you realize it or not, if you did not get paid for signing someone up into debt settlement and you were really focusing on the client with a blank slate (and you knew what was best for the client) I guarantee you would refer less clients to settlement. You can disagree all day long, but your business model requires you to do that.

    Ans, thats why I carry them all…no pressure… if one really need help and they fit better in one product over another then that’s more than likely the solution, same thing you do.

    Oh, here you go with the fear again. Yup. That is what I am doing. I am just making up all of this bad stuff about debt settlement to scare people. Funny how none of my clients ever complain about me isn’t it? I think there is definitely some fear going on, but it isn’t coming from me or my clients.

    Ans, there is nothing you can tell me that would make me believe you don’t use everything that has transpired in the DS industry to your benefit, your in a for profit business Damon, give us all a break, you promote fear.

    I fool “Know” one? How specifically am I not fooling anyone? Do I say things that are untrue?

    As fun as this is for me, I am sure it is a total drag for consumers to read when the best you can do is jump up and down about answering your questions. I am sure I missed one or two of them somewhere and that will be your next bone of contention. However, instead of acting like idiots and getting out our measuring sticks, why don’t we do something constructive?

    How about consumers in debt can call you and listen to what you have to say. Then they can call me for the right information and decide whether one of us actually makes good sense or if we are both just full of crap. What do you think?

    Ans, i’m cool with that.

    I am curious. Do you really believe this stuff you write, or have you just run out of ways to try and logically discredit what it is that I do?

    Ans, that not what i’m doing at all, look in the mirror buddy.

    “Run for the hills…. Don’t talk to Damon…. He is just a fear monger… You shouldn’t listen to anything he says…. Please just sign up in my program without talking to him because he will scare you away…. He is a bad guy and said bullshit…. Stay away from him please.”

    That is about what I have cleaned from this exchange so far. Why are you so afraid of consumers talking to me Mike?

    Ans, again, I’m not at all afraid. Like you when I speak to a consumer in financial trouble, not to pat myself on the back but, when I complete my analysis their not talking with anyone else.

    So there you have it, one final answer and I feel great, don’t make us all wait, you’ve had plenty of time to think up a good one…the video, why didn’t you post that spot-on consumer warning on your site?

  • This is becoming amusing for me and a train wreck all at the same time. What is it that you think you are gaining here Mike? I am just curious.

    Ok, here are the answers to your questions. For someone who isn’t attacking me you certainly seem to be throwing a lot of questions at me and insisting on an answer. That is weird right?

    A few of my criteria for recommending a debt settlement company?
    1. They have been in business at least 3 years and preferably 5.
    2. They were performance based even before the FTC required them to be so.
    3. They charge a fee that is much lower than the typical settlement company.
    4. They have a track record that shows clear results, little to no complaints.

    Debt settlement isn’t rocket science. If the company puts the client first, the rest is easy, providing you only bring on the right clients. Of course any client I tell to look at settlement is the right client, or I wouldn’t tell them to look at it.

    Those are some of the main things I look for. Keep in mind. I don’t tell a client who to hire. I just give them the names of companies that I know are good and have known of them for quite a while. Then they have a list of good companies that they can chose from, or chose a completely different company and ask me for my opinion. I won’t just give my opinion. I will also give the reasons for my opinion and they can decide if I make sense or if I am just full of it. The fact that I can get them a large discount with pretty much any debt settlement company just sweetens the deal for my client don’t you think?

    How involved I am with a client after the initial consultation is up to the client. Some clients only have one consultation, others might want to have me available in the future. It is up to them.

    I don’t typically just point my clients in a specific direction and that is it. I use a process whereby we look at multiple scenarios based on various possible circumstances and work through various solutions with some if/then scenarios. The difference is, that I make sure my clients don’t get into anything that their current or likely future circumstances makes it unlikely they will be able to complete. If they lose their job and possibly have to file BK, there is nothing I can do about that, but I certainly will prepare them for that.

    If you are willing to bet your “financial analysis” that you do for free is more insightful than what I do with my clients, how much are you prepared to lose? The facts are simple, you are spending a ton of money on this SEO campaign you are talking about. You make all or a bulk of your money when you sell your debt settlement program. In contrast, I spend 0 dollars on advertising, all of my clients are referrals, and I get paid specifically for providing good, unbiased information. I make the same amount of money regardless of what the client needs. Is it logical to think that you recommend debt settlement much more often than I do? You can answer that question, but the facts are, you would go out of business if you only recommended hiring a debt settlement company as often as I do.

    There are times when hiring a debt settlement company is the best move for the client. There are also times when the client can clearly do it themselves. There are then other times where multiple solutions are possible, but knowing which one is the best will require a much more in depth understanding of the clients overall circumstances.

    I will let the consumer decide which one of us will do a better job covering that. The one that sells one of the options, or the one that sells none of them… Hmm lets think about this for bit.

    Would you prefer to go to a fee based financial planner and pay for non incentivized advice. Or go get a free financial analysis where the planner makes money only on the loaded mutual funds and insurance that he recommends you need?

    Sorry, “facts is facts,” whether you agree with them or not.

    No sales pressure? That is great, glad to hear it. There is a difference between no sales pressure and professional bias. The facts are clear. Bankruptcy attorneys tend to recommend BK as the best solution more often than not, Debt settlement recommends debt settlement, CCCS recommends what they do. Whether you realize it or not, if you did not get paid for signing someone up into debt settlement and you were really focusing on the client with a blank slate (and you knew what was best for the client) I guarantee you would refer less clients to settlement. You can disagree all day long, but your business model requires you to do that.

    Oh, here you go with the fear again. Yup. That is what I am doing. I am just making up all of this bad stuff about debt settlement to scare people. Funny how none of my clients ever complain about me isn’t it? I think there is definitely some fear going on, but it isn’t coming from me or my clients.

    I fool “Know” one? How specifically am I not fooling anyone? Do I say things that are untrue?

    As fun as this is for me, I am sure it is a total drag for consumers to read when the best you can do is jump up and down about answering your questions. I am sure I missed one or two of them somewhere and that will be your next bone of contention. However, instead of acting like idiots and getting out our measuring sticks, why don’t we do something constructive?

    How about consumers in debt can call you and listen to what you have to say. Then they can call me for the right information and decide whether one of us actually makes good sense or if we are both just full of crap. What do you think?

    I am curious. Do you really believe this stuff you write, or have you just run out of ways to try and logically discredit what it is that I do?

    “Run for the hills…. Don’t talk to Damon…. He is just a fear monger… You shouldn’t listen to anything he says…. Please just sign up in my program without talking to him because he will scare you away…. He is a bad guy and said bullshit…. Stay away from him please.”

    That is about what I have cleaned from this exchange so far. Why are you so afraid of consumers talking to me Mike?

  • Damon you can twist this anyway you like, it’s so easy to see right through you and just for clarification your reasons above is why I believe you have a comprehension problem.

    Answer the questions….

  • So once again you refuse to answer the real questions at hand. If you want to play then play by the rules. I don’t play by your rules Damon because they are one sided.

    ANSWER THE QUESTIONS TOUGH GUY, or go away!

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