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Why Can’t Debt Settlement Companies Tell You Exactly How Long Their Program Will Last?

Debt settlement is a negotiation process and until an agreement is reached between the debt settlement company you hire to work for you and your creditors, nobody knows exactly how much you will end up paying. Typically the company puts you on a payment plan that will last no more than 36 months however if they are able to reach agreements with your creditors in less than 30 months (which they are saying is likely) then you would be done earlier than the 36 months and would no longer make the monthly payment.

A Simplified Example:

Say you have exactly $30K in debt and $10,000 is with credit card company “A” and $20,000 with credit card company “B”

Say your monthly payment they quoted you is $500 (I have no idea…just as an example)

You’d pay $500 to your settlement company every month

At the end of 12 months, you would have paid the settlement company $6,000

You settlement company believes that credit card company “A” may accept $6,000 or less instead of the $10,000 you owe as a settlement

They then begin to negotiate with company “A”

A settlement is reached where company “A” accepts only $5,000 and that is taken from the account you have with the settlement company

So there is $1,000 left in you settlement company account and you are still paying $500 per month to save money until you have enough to negotiate with co. “B”

So to sum it up, because it is a negotiation that takes place only after you have saved up enough money (since credit card companies A and B will want to be paid immediately after the settlement is reached), no one can tell you exactly how much you will end up paying. They can only make an educated guess based on their prior experience with your creditors and other clients which is what they use to quote your monthly payment figure.