The following guest post was contributed by Sean Ryan Managing Partner- Veritas Assurance Group- [email protected]
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Veritas Legal Plan offers the only legal plan created exclusively for the debt settlement industry. The plan hires and pays 100% of attorney fees to defend creditor lawsuits! Now, Veritas Legal Plan is proud to announce we are an approved vendor with both Global Client Solutions and NoteWorld Servicing Center thus creating a simpler streamlined way of legally protecting consumers against creditor lawsuits. Consumers accumulating funds through Global Client Solutions and NoteWorld are now able to schedule one monthly draft that includes both their settlement funds and their Legal Expense plan payments. Veritas Legal Plan still has the ability to draft client funds directly at no cost to the consumer, the only option our clients had until now.
The Veritas Plan may be purchased as an option by the consumer when enrolling in a debt settlement program and it will hire a local attorney to defend creditor lawsuits. We hire and pay 100% of the attorney fees for the lawyer to do whatever it takes to defend the lawsuit, including appearing in court, if necessary. The Plan is backed by Hyatt Legal Services, a MetLife Company with an attorney network of 12,000 experienced lawyers. We designed the Plan with Hyatt Legal Services to serve only the debt settlement industry and to address that one issue. Although it is not available in all 50 states, now most clients enrolled in a Debt Settlement Plan should not be without the legal protection of the Veritas Legal Plan.
It is always advisable, when facing a lawsuit, to hire an attorney to represent you. If you choose to represent yourself, the Plaintiff’s attorneys may have a huge advantage. If the consumer has money saved they may be faced with the decision of what to do with it. Should they spend it to hire an attorney, or go it alone and represent themselves, keeping their money available to pay a settlement? In a perfect world the consumer would hire an attorney and have money available for a settlement, an option now available only to settlement clients enrolled in The Veritas Plan. Until now a debt settlement client was faced with that dilemma and forced to represent themselves. In recognizing the potential problem here for both the client and the settlement company, we came up with The Veritas Legal Plan. The first and only legal expense plan created for consumers enrolled in a debt settlement program.
Though a consumer does not need to be enrolled in a debt settlement program to receive the benefits of the Veritas Legal Plan, many debt settlement companies see the added value of making the legal plan available to their clients in conjunction with their settlement program and have done so. Generally, the plan is offered to the consumer by their settlement company as an option. Federal laws require debt relief providers to disclose the fact that defaulting on creditor payments may result in lawsuits. Before The Veritas Plan, most settlement companies had nothing to offer their clients to help in the event this takes place, and, when it did the client was often left feeling scared and alone. In our experience, one of the most common reasons consumers quit a settlement program is that they receive a lawsuit. Often, that is when they find out that the settlement company they are enrolled with offers little help and the client is pretty much left on their own.
A little background for those not so familiar with debt settlement: A debt settlement program is typically used by consumers who can no longer afford their credit card debt and either cannot afford the payments in a debt management plan or do not want to file bankruptcy. They have had a financial hardship and can no longer afford to keep up their minimum payments. There are many performance based debt settlement companies throughout the country now that the FTC Rule for debt relief providers has gone into effect, providing that debt settlement companies may only charge fees for their service at the time of settlement, not before. “Performance” based debt settlement companies usually will charge their fee as a percentage of how much they saved the client on the settlement. This type of debt negotiation provider is becoming the standard and there are far less risks now associated with entering this type of settlement program. One risk which remains, however, and one which legally must be disclosed, is the risk of being sued once a consumer defaults on their unsecured debts. Generally, the debt will likely be charged off and sold to a debt buyer or assigned to a law firm/collection agency before the consumer will receive a summons. Whether or not the client will likely receive a summons depends on many factors, including the clients’ State of residence, their creditors, the amount of a debt, the time in default & often just plain luck in to whom the debt is sold. Once presented a lawsuit, the settlement company should look to settle the debt by whatever means possible. The amount and terms of the settlement are uncertain, but in answering the summons, the client may buy themselves a little more time to save some more money to assist in the settlement.
Settling a debt will show up as negative information on your credit report, but if you negotiate a settlement it shows that you took responsibility to pay as much as you could, versus nothing on the debt and the rebuilding process begins. While there are no guarantees in debt settlement, when faced with difficult financial decisions, debt settlement may be the best option. A typical settlement program will take the total amount of debt owed and divide it in two (a good debt settlement company can often settle most debts for about half of the amount owed, including their fees). This amount is what the consumer typically needs to come up with to get out of debt over time. Divide that number by how much the consumer can afford to put away each month and that will give you an idea of how long it will take to accumulate enough funds to settle all of the client’s accounts.
As time passes, debts are resold and often, at some point, may find their way to one of the thousands of debt collection law firms, which, in turn, may result in a court summons. Hopefully, the settlement company was up front about the possibility of receiving a summons and how they plan to work through it. Either way, when you stop paying your creditors, legal action becomes a very real possibility. Further, depending on where you live, most summonses require an answer in 20-30 days. Statistics claim that 90% or more of these lawsuits are ignored and unanswered. This is what the collecting law firm wants. Ignore the summons and the result is a default judgment in favor of the creditor for the full amount of the debt including late charges, fees and now court costs.
A good debt settlement company should offer the client, at the very least, some guidance to answer the suit and then contact the Plaintiff with an offer to negotiate terms for a settlement. If you are in district court you may have a right of discovery, meaning that you can send them interrogatories and requests for production of documents, asking how they calculated the current amount sought, how much is for interest and costs, whether all of that is in compliance with your agreement with them, and for copies of your original signed credit application and any and all documents that they claim form any part of your contract with them. Some firms can produce these documents and some cannot but, at the very least, you will have pushed them into the defensive position and you will have some bargaining power (and much more time to accumulate funds) when the day comes in court to seek settlement. Once a lawsuit is filed the Plaintiff will look for high settlements and expensive terms in comparison to a typical debt collector, often 70- 90% of the current balance of the debt versus 30-40%, so going it alone may result in added expenses for the client and less fees for the settlement company. While there are no guarantees, a well represented client is always in a better position.
And now, through Global Client Solutions and NoteWorld Servicing, the settlement company has the advantage of offering their clients a single draft for both The Veritas Plan and their settlement program. Other advantages to the client may include better settlements, more time to save money when presented a summons, a greater success rate in completing the settlement program and the peace of mind that comes with knowing their legal needs are professionally looked after through The Veritas Plan. Some of the benefits to the settlement company providing The Veritas Plan to their clients include, better retention, happier clients, better settlements and more clients (in the event they are shopping you against a legal model offering less legal services for more money!).
For more information on The Veritas Plan, call Sean Ryan at 561-666-4023.
Being an approved vendor with Global Client Solutions and NoteWorld Servicing should not be, nor is it implied as an endorsement by either company for use of our product.