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Debt settlement program refund? Too good to be true.

Debt relief isn’t always pleasant to a consumer’s credit score. However, for many, it is not an option but a necessity to avoid Chapter 7 bankruptcy. Many people opt for debt settlement, thinking that it’s the best way to pay less than they owed, and get out of debt quickly. While this is true, you will have to spend some time rebuilding your credit. Often times, consumers see their scores begin to improve during or shortly after completing a good relief program.

What many people don’t know is that they may get a refund after completing a settlement program. There’s a few reasons this could happen, and it’s a great way for a consumer to get back on their feet.

These instances are more common than some debt settlement companies will tell you, but we’re not one of those companies. We’ve given many refunds to our clients over the years, and we look forward to giving many more. This article will look at the scenario in which a client may get a refund, and if it should be expected.

I’m debt free! Now where’s my refund?

To understand why there may be a refund in the first place, you need to understand the process of debt settlement. While in a settlement program, your payments are going directly into a debt relief savings account. This account is used by the negotiators to settle your individual debts for as low as possible.

This process may continue for 1 to 4 years, until all of your debts are settled. At the end of the program, there may be funds left over in this debt relief account, especially if the negotiators were good. This balance is your money, and should be returned to you minus any program fees for the final settled debt.

I finished the program and didn’t get a refund!

It’s okay, this is not uncommon. It’s a fine balance. We don’t want you paying too much into your account that it affects your standard of living. At the same time, we want enough funds in your account to effectively negotiate. Often times at the end of the program the negotiators will use the remaining amount in your account for a hail mary settlement. This saves the consumer a huge amount on the debt, but doesn’t result in a refund.

Other times, the negotiators have managed the account well enough to have at or near the exact amount of funds needed to get you clear of debt. Remember, the negotiator working on your account has been building a strategy on your behalf the whole time you’ve been in the program. It’s not unlikely they have mapped out the repayments to match your funding schedule perfectly.

If this is the case, don’t worry, you’re still debt free! Remember to ask for a final statement, or check your settlement account balance yourself at the end of your program. If there are funds left over, don’t be afraid to ask about a refund. With a good debt settlement company, you won’t have to 😉

 

Your partner in debt relief,
Consumer First Financial