Is there is a simpler way to determine the right type of settlement company?
So the answer is YES.
Here is a simple mathematical way of determining which of the three settlements options to use. But the to re-cap the three types of settlement companies are:
Front-fee based performance (or commissioned) based do-it-yourself
The math expression to determine if the above is correct do the following:
your unsecured debt total x 60% = the overall settlement figures
$30,000 x 60% = $18,000
$18,000 is what you will have to pay out including fees, interest and other penalties.
How to figure out how much a month you have save every month for this settlement use this:
the total settlement figure divided by the number of months needed to get through the program.
$18,000 / 35 months = $514.29 a month.
Now, a performance based company has to be quicker than a front-fee based company so the number of months to ideally get through a program, for most states is 30 — sometimes 25 months depending on the state. I.e. New York requires a 25 month program ideally.
Front-fee based can be longer.
On the front-fee based companies sometimes you find that savings required by that company are less than that, but it would not be recommended as it draws out the program longer than the banks will comfortably allow and opens up to heavy pressure and legal cases.
For do-it-yourself, instead of 60% you use 40%.
I would use the equation to see if you qualify for a performance-fee based company first. If you can’t save up the monthly need amount then look into a front-based company which is more extreme. And if you can’t afford that monthly savings then do-it-yourself is the best option.
However, do to recent passed laws, there are 10 states that debt settlement is illegal in. In those states you either have to do-it-yourself or use an attorney.
I hope that helps give you some guidelines go to by. Of course there are other considerations so it is not the end-all, be-all to determining the right company… but it is a start.