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i looked at one company and very little is put into your account for almost 1 1/2 years because they take almost everything for their fees first. is this normal? for example the first month you send $335.00 to them but only $80.00 goes to your account. at this rate you will take forever to even pay off one bill. after 16 months you finally get to keep most of what you put in. is this usual practice? i could understand maybe a third but 2/3 or more seems excessive. is this how debt settlement companies get paid?

The payout structure that a debt settlement company charges vary greatly from one company to the next however, once all payments are accounted for the standard practice is to charge 15% of your debt amount. Some a little more, some a little less but that is a good benchmark to use.

When evaluating the fees, you need to be sure to include ALL fees in your calculations even the small monthly account maintenance fees some companies charge because those add up over 18-36 months.

Yes, it’s true that debt companies like to collect most of their fees as fast as possible because they are investing their time into your account and they cannot be sure you have the discipline to remain in their program. Some people get into debt situations due to unforseen circumstances many beyond their control (job layoffs, medical bills, etc) but remember many get into debt from sheer irresponsibility.

When you talk to a debt company, they do not know how reliable you are and your exact situation so they try to protect themselves by taking a large portion of their fees in the first few months. This is how debt settlement companies get paid.

The situation you describe sounds excessive. Most companies will take the entire amount of the first few payments and then a portion of all the rest. Thanks.