"He who represents himself has a fool for a client".

Let me guess, a quote from a lawyer ?

Makes sense I guess, when you have lawyers elected as deputy judges,
by senior Judges. Kind of an oxy moron don't you think ? "Lawyers" "Judging" ?

It's not about representing yourself as much as following the law. No one is above the law, And we are all equal in law. No one will work harder for a case, then one who represents himself. The advantage. Unlimited time, with zero costs.

Disadvantage: The Self represented does not have anyone on the other side that owes him any favors.

The Self represented is only a fool if he does not know and or exercise his rights as a Canadian citizen. If the self represented knows his rights, then he's a fool to get a lawyer.........

Yes, I remain skeptical about some of the low settlement rates Mark Silverthorn claims in his books. Trying to represent yourself in any kind of court (other than small claims) though is another matter. That's why a lawyer always hires another lawyer to defend them. They're well aware of the first rule of law school: He who represents himself has a fool for a client.

Completely understandable. It was a fair assumption.

I've got the TCR settlement letters at the office, that could be posted, but I'm sure we don't have to go that far. While MBNA has lower parameters than others, that's true, but that doesn't mean everyone will get 35% just for asking nicely either. I think you might be under-estimating the work it takes to get lower settlements. For those who have tried to do it themselves, the reality of the results one might typically receive can be quite different than what some threads here might lead them to believe.

We don't publicize our rates as collection agencies and creditors would obviously want to ensure that any funds available to pay our fee would be paid to them instead, so you will have to take my word for it I suppose - or not. There's no reason anyone who knows what they are doing shouldn't be able to settle their own debt, fight their own traffic tickets, do their own taxes...you see where I am going. Most people don't know what they are doing. Most aren't even aware that the settlement option exists. We are good at what we do and by being savings-based are motivated always ensure we do the best job possible to achieve the lowest settlements for our clients.

When you said, "Absolutely no other assets or means of repayment" wrt homeowners A&B, I assumed you included income. After all, income is a "means of repayment" isn't it?

I'm also suspicious of the rates quoted for TCR. I doubt if they would would settle for a penny less than they could get through litigation.

I also strongly suspect the rates you charge end up being around the 20% mark, but I have no way of knowing. In any event, there's no reason why a person can't settle their own debts for as low as what you offer, or lower once the middleman is cut out. Many outfits like MBNA, will settle directly with clients without too much effort for 35%. Depends on whose desk it lands on other times.

It's getting late here to still be going back and forth on this, but you're right in that our clients typically come to us beyond the 6 month point, when collections calls are at their worst and threats against their property begin to be made. This is usually when people decide they should take some kind of action. One can expect the settlements on anything under 6 months to be higher than the rates I mentioned previously.

With regard to the homeowners illustrated, I think there is some confusion. To clarify, when I said the homeowners had no other assets or means of repayment I did not mean to say that they had no income. Neither I, nor any mortgage broker I work with would place a client in a mortgage they are not able to afford. I simply meant to eliminate other possible sources of funding (RRSPs, pensions, savings, etc.) as a variable for simplicity.

The examples of the homeowners with TCR debt are not real cases. They were for illustrative purposes, so I'm glad you didn't think they were real cases. The two CIBC settlements mentioned before that were real examples, though (incidentally they were from TCR - they see a great deal of CIBC debt).

Unfortunately, I don't have a direct answer for your questions as the debt we typically see is beyond 6 months and when beyond 2 years, already has a judgment in place. The accounts we handle that are under 6 months are usually one of many delinquent account a client has that are beyond the 6 month point. To achieve low settlements on accounts under 6 months, one could strategically settle that particular account last and submit (along with all other documentary evidence) settlement letters from the other creditors that settled at a lower rate. Generally speaking, assuming the debt is rated at least R4, a settlement will fall somewhere in the vicinity of 10% of the other settlements. I could use this as a way to estimate 45-55% settlements on debts under 6 months, but that would be a little misleading as they were achieved on the basis of debt which was over 6 months old.

We're not like many other firms in that we select our clientele very carefully and only recommend settlement when we know it is the best option and will achieve the results they are looking for. While I agree there are others in this industry that are guilty of some of your characterizations of debt settlement firms, ours is not one of them.

Thanks for your detailed response and reminding me of what a hopeless mental case I am compared to the elite cognoscenti at your firm.

Unfortunately, you only answered my specific questions with hypothetical cases. The reason I asked was that the owner (and ex-collection agent), Richard Cooper, of Total Debt Freedom - a top rated firm according to the Toronto Star - who also frequented this website, claimed an average settlement ratio of 58%. I realize the wide statistical variations that occur due to the various kinds of debt and situations debtors find themselves in. However, if a large enough sample is taken, the variations iron themselves out. I also asked for debts under 6 months because they would be the most challenging, particularly if the person had any significant equity in real estate. But I reckon by the time they come to you, they've already maxed that avenue out through second mortgages.

In the 2 TCR examples, certainly, a horrible outfit like that would sue at the drop of a hat if there was a percentage in it. But foreclosure sales with less than $50K or $75K equity are time consuming and risky due to appraisal inaccuracies, selling expenses and the nature of the sale. Which would be the only reason such a bloodsucker outfit might be willing to settle for a lesser amount.

It's hard to believe how homeowner A would be eligible for an additional 10%, unless the lender was charging them another 10K+ in broker fees and a higher interest rate than their present line of credit charges. How could it be otherwise? Who would even grant a second mortgage to a borrower under those circumstances? They have no income or assets, so how would they be able to make the payments on a second mortgage, if they can't pay off their current line of credit? The point is if they've reached this stage, they've effectively lost their home already; it's just a matter of time. The only difference would be that a vulture outfit like yours might get a finders fee from the unscrupulous broker as well as a commission on "settling the debt" which merely shunts the debt from one lender to another. Of course, I don't believe those are real cases, but you get the idea.

And so once again, I raise the questions: what is your average settlement ratio for debts under 6 months old, and what is it for debts that are in excess of 2 years old? Please answer the questions instead of telling me how superior your are and what a dolt I am.

Your limited response says a lot. I'll humour you nonetheless.

6 months isn't a fair time line. Debt is still collectible after 6 months and the fact that it has been written off does not mean that it has been sold. I should mention we typically deal with higher total debt loads of $30,000 and above with the average one being somewhere between $40,000 and $50,000.

Average settlements can usually be expected in the 35-45% range depending on the original creditor and the person's particular financial situation. There are many factors that determine how low of a settlement will be approved. I recently had two CIBC accounts for different clients in much different situations. One settled at $9750 on an account just over $39,000, while the other settled at $5000 on a $11,000 account. There are no guaranteed settlements and just because CIBC settles very low on one, doesn't mean anything for how they will settle on another. Factors like the person's assets, other debts, reasonable access to funds, personal financial hardship, etc. are all part of the determining factors.

Take two homeowners with homes valued at $400,000, for example, each with a $30,000 delinquent line of credit with CIBC being collected by TCR (written off, not sold, and still able to be pursued by legal action, but no judgment in place yet).

Homeowner A

Home value - $400,000
1st Mortgage Balance - $300,000
Currently at 75% LTV
Absolutely no other assets or means of repayment

Homeowner B

Home value - $400,000
1st Mortgage Balance - $300,000
2nd Mortgage Balance - $25,000
Currently at 81.25% LTV
Absolutely no other assets or means of repayment

A simple review of the homeowners can lead to differing settlements even though they have the same debt with the same institution. Homeowner A, through an aggressive 2nd mortgage or refinancing of 85% LTV would have access to $40,000 minus lender/broker fees. Homeowner B, however, because of the 2nd mortgage is already at 81.25% and would only have access to $15,000 minus lender/broker fees at 85% LTV. All other factors being the same, Homeowner B can expect to pay a lower settlement than Homewner A.

I illustrate this for two reasons. First to make it a little more clear that settlements aren't simply two people on the phone saying different numbers to each other until they agree. A good settlement will involve presenting a strong case to justify a lower settlement and equally strong rebuttals for counter-offers. Collection agencies like TCR, for example, use horrible information to estimate the value of homes, assets, and general potential for repayment. A good settlement involves discrediting their information in place of your own. The other reason for the illustration is to give this thread a little bit of usefulness for anyone still paying attention, instead of just pointlessly arguing with you.

Unlike other agencies, our fee is savings-based rather than total debt-based, so our fee is always relative to our settlement performance. A staggered fee of 7-10% is billed on the savings negotiated for a client depending on the settlement rate achieved. For a $30,000 debt settled at 35%, for example, the client would have a settlement payout of $10,500 and there would be $19,500 in savings and a fee of $1,950 (billed at 10% of the savings). The client would have a total cost of $12,450 for having settled $30,000 in debt - an overall rate of 41.5%. I can confidently say we provide an excellent service at a very reasonable rate, with an excellent fee structure that is focused on protecting our client's interests first and foremost.

Your point, as you call it, isn't a point at all. It's merely a useless statement of opinion with no discernible basis. While I hesitate to stereotype, in my experience, few collectors make good settlers and are often back in collections work very quickly. There is an obvious overlap in the knowledge base required to serve both functions, which is the reason for many former collectors attempting to work on the settlement side. Many also enter the mortgage brokering industry as well for similar reasons. A welder will likely only find other work as a welder, so to derive some kind of derogatory conclusion on the basis that a collector would be limited to debt settlement is simply flawed.

Ok Buddy, enough of the bs; how much do you settle debts for that are less than 6 months old; in other words, debts that have not been written off or sent to litigation yet (if they will be at all). What is your overall average on this class of debt and what is your cut? Is that cut included in the percentage?

My point was that collection agents are a bunch of useless parasites and bums and, being too lazy to get a real job, gravitate toward the only place that will take them, debt settling - unless they want to work as security guards.

Actually I've never done any collection-related work. While I realize that many settlers are from the collection industry, I fail to see how that does anything to further your point. In fact, to anyone with any degree of logic your ad hominem-based arguments only detract from your point as a whole.

I don't find any validity in any of your arguments at all. My comparison to other services is merely to illustrate that we all pay for middle-man services with varying degrees of specialized knowledge. Try making the same argument you made for the tax lawyer for a traffic ticket fighter or a small claims court paralegal. Note that I also included such services as landscaping, car repair (or at least maintenance), and/or plumbing. You could add hundreds of different services to that list that you would have to be foolish to call "highly specialized services". Any idiot, as you say, with any reasonable degree of intelligence could perform hundreds of 'banal' services for themselves that they instead pay to have done by more experienced service providers. Your logic in diminishing debt settlement can be equally applied to hundreds of different services. Without even having to address whether or not one should consider debt settlement specialized knowledge, your argument fails.

Now I do understand that there are debt settlement companies that practice equally despicable practices as collection agencies. However, once again, the same could be said for any industry. Personally I am vehemently against collecting fees until a settlement balance is reached and will only accept funds for lump-sum settlement-in-full payments. There are some - even among those listed on this site - that collect fees in this manner and if/when a client fails to reach such a balance will end up billing for a significant portion of the balance paid as "management" or "administrative" fees and never pay the person's creditors a single dollar. These are disgusting practices that take advantage of people. I have never billed a single dollar for anything besides the service I provide as I work on a complete contingency basis, with no upfront fees. Personally, I feel all debt settlement should be billed in this manner...and for transparency's sake, my degrees are from York University here in Ontario and I graduated magna cum laude with honours.

Unless you have direct knowledge, your figures as to what a person could save are completely without basis and worthless. I speak with direct knowledge and from daily experience. Without it I would have the decency to restrict myself from making unsubstantiated claims. While low settlements may be much more easily achieved with purchased debt, I can assure you that with my clients least, the vast majority of debt is NOT purchased. At least 95% of the debt I settle is active, collectible debt being held by the original creditors and collected by either pre-legal action collection agencies or law firms once judgment has been obtained. To suggest that 'any idiot' could pick up the phone and get 50% on active, collectible debt, be it at a collection agency or on a judgment with a law firm, is not only inaccurate, but also misleading. Depending on who the original creditor is, the typical settlement parameter given to any given collection agency on active debt is between 70-80%. Collection agencies are not permitted to approve settlements below these parameters. Instead, bellow parameter settlements are approved by the original creditor who makes a decision for rejection or approval of the offer based on a number of factors, including, but certainly not limited to potential for full recovery by litigation. With a judgment, settlement at 50% is even more challenging for what should be obvious reasons. You should also note that these same settlement or 'joe-boy services' are also provided by both paralegals and lawyers alike and at MUCH higher rates. Surely these legal professional practicing in this particular area have 'real jobs.'

I take no offence to your flawed arguments, nor do I understand the aggressive and insulting stance you take. I have earned my degrees and need no further accreditation, however, if your ability to logically express yourself is any indication, the pursuit of an adequate post-secondary education is one you would be much better suited for.

My posting in this thread began with the intention of providing the OP with information that would better prepare him for settlement negotiations with CRS. I did not post to hock my services under any guise of benevolence. If users would restrict themselves to posting to assist those asking for information or assistance instead of ignorantly insulting those are are actually trying to help, this would be a much better forum.

Are you an ex-collection agent perchance?

The old adage "bullsh** baffle brains" was never more true. Comparing a debt settler to "middlemen" such as lawyers, accountants, auto mechanics and the like is sheer rubbish, since these are actual service positions. All these professions provide highly specialized services the layman would have no hope of performing on his own. A case in point: In December, I attended a case where a Bay Street tax lawyer got $1000 an hour. Now you might surmize this was an excessive fee, but after seeing him in action, I figured he was worth way more and told him so. I don't know about you, but trying to change the timing belt in your car when you live on the 10th floor condo; well, good luck.

Trying to compare these professions to the "joe-boy services" provided by a debt settler is absurd. Any idiot can call up a creditor and say, "Hey, bros., I'll give you 15% - take it or leave it." Besides, who knows what side deals the debt settler - who is usually an old collection agent - and the creditor have going on? In many cases, the debt settler keeps all the money for himself until a certain amount is reached, and then may or may not remit it to the creditor. That's why the Province of Ontario recently introduced legislation to control these clowns. In fact, one settler (who advertises all over the web) on the forum got his BBA from cheap degrees.com.for $239.95. Would you really trust a character like this?

Trust me. If you save a guy $5,000 say, then you can be sure he could have saved $6000 or $7,000 on his own without your "help". Anyhow, that figure is surely based on the assumption the debtor would have to settle for 100%. But any idiot can usually get 50% on their own without even trying - and likely a lot less. What is your average settlement percentage rate, taking into account ALL your unfortunate clients?

Bottom Line: Get a real job and stop masquerading as "financial professional." And if you need additional accreditation to go with a cheap degrees.com diploma, for $595.00 you can get your IAPA diploma. Just think: forget the $80,000 MBA, all you need is $239.95 plus $595.00 (Paypal accepted) to become a financial pro.

http://www.iapda.org/join-the-iapda.php