I’m Working With Franklin Debt Relief on a Debt Settlement Program. – Rob

“Dear Steve,

I had about $12,00 worth of credit card debt. I signed up with a debt settlement company (Franklin Debt Relief) and they worked down my two biggest debts. However, it does show as settled for less than full amount.

I have three more debts that need to be paid. I had to make three large monthly payments to finish those first two debts, and then my car was stolen. While I no longer had a larger car payment, I also had no car. So I was forced into a loan with a local used car dealer, but the payments are still less than before, but the down payment did not allow me to continue putting money into the debt settlement program.

I am now being contacted by them to try and settle these final debts, but they have been charged off and into collections. I have considered taking a loan from my 401K and trying to settle these debts so I can try to repair my credit as quickly as possible. I currently work 180 miles from home, so I spend part of my week at my mother-in-laws with my family and a few nights in a hotel where I work. I want to get a house so I can finally move my family down here as soon as possible, but I know credit repair takes time.

I guess my question is, what would you recommend? Should I speak with the collections companies and try to settle the debt myself? Should I continue with Franklin Debt Relief and have them settle my final debts? And once they are settled, how long should I expect before my credit begins to improve?

I have two open credit card accounts with low balances that I pay each month so at least I have some positive things reported on my credit report. Any help is greatly appreciated and I would be happy to provide any additional information you need.


Dear Rob,

Nice to hear you appear to be satisfied with the service provided to you by a debt settlement company. A welcome change compared to all the other emails I get about debt settlement programs.

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I really can’t answer your question without more information. I need to know how much you owe on those two accounts you want to settle and how much you can afford to save or pay each month.

In general I am very opposed to borrowing money from a 401(k) to pay off debt but I’m willing to consider it with more information about your situation.

I am concerned that you work so far from home and that you might just be making it barely from month to month with your new financial obligations.

The good news is that if we can resolve those two last accounts to settle that it should not take longer than a year to see a marked increase in your credit score.

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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.
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6 thoughts on “I’m Working With Franklin Debt Relief on a Debt Settlement Program. – Rob”

  1. Debt Settlement Company – Timelinedebt – Timeline Debt Solutions LLC is a debt settlement company which can reduce your unsecured credit card debt by as much as 60% and have you eliminate your debt in as little as 12 – 36 months. Our senior debt consultants are standing by to tailor a debt management program that is right for you.

  2. Rob,

    As I sit here thinking about this I find myself perfectly ambivalent about the options. On one hand you could borrow about $4,000 from your 401(k), not including debt settlement fees to Franklin if they handle this for you. While the 401(k) loan might close the book on those last two accounts, you’ll actually have to take out about $5,700 to cover the taxes and penalties on the withdrawal to leave you with $4,500.

    Additionally, if you took the money as a loan against the 401(k) plan and it is is with your current employer and you voluntarily or involuntarily separated from that employer the entire loan would be immediately due. And you don’t have that kind of money laying around.

    It is doubtful that saving $100 a month towards settling $7,500 worth of debt is going to result in a successful result before your child is born in five months. And here is a fact you may not have considered, any monthly savings plan is going to be nuked with the arrival of your child. Kids are expensive and the miscellaneous costs will easily chew up $100 in savings. And from your original question I already suspect you are living on the financial edge to begin with.

    Honestly, I’m probably leaning more towards bankruptcy in your situation. Here’s why.

    1. You are already close to the financial edge.
    2. You don’t seem to have any emergency fund or savings account to fall back on.
    3. Without an emergency fund, any unexpected expenses will land on credit, defeating the whole purpose and plan.
    4. With a child on the way in five months there is no expectation that the money saved will even begin to resolve the situation.
    5. As a parent you have a duty and responsibility to care and protect your children in case of an unexpected emergency. Without the ability to save you can’t do that.
    6. You can’t move forward without closing the door on these last debts. Otherwise you will never know when they will sue you and potentially garnish your wages, which you can’t afford.

    Let me know in the comments what you decide to do. You should call a local bankruptcy attorney and make an appointment to go in and discuss the situation. Not to file but to learn more and be better able to make an informed decision about what is best for you.


  3. Thank you for your reply Steve! My one account has an approximate balance $4,500 and the other approximately $3,000. I’ve been saving about $100/month for the last few months, but my wife is 18 months pregnant. The baby is due less than a week before Christmas, so I know I’m going to need some of that savings. Please let me know if you need any additional information.


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