Debt Elimination Interview Dan Smith New Era Debt Solutions is a debt settlement company that helps people to dramatically reduce their debt obligation and become debt free.
Question #1 - What is the main mission of New Era Debt Solutions?
We have both a Mission Statement and a Vision Statement.
Our Mission Statement:
New Era Debt Solutions is committed to helping families improve their quality of life by freeing them from the burden of debt. It is our goal to help people eliminate their debt as quickly and inexpensively as possible.
Our Vision Statement:
Based on sound principles, high standards, integrity, and customer satisfaction, New Era Debt Solutions will be the best debt settlement company in America, and a model for what the entire debt settlement industry should be.
Question #2 - On your website, it's mentioned that the company has been in business since 1999. What's the story behind the startup of this company?
Back in 1999 I was an independent financial planner licensed in securities, insurances, and real estate. I started my own company called DTS Financial. Sitting down with families it became evident that debt was becoming a major obstacle to overcome. Getting rid of their debt was step one in a sound financial plan.
I began looking for the fastest and least expensive way for families to get rid of their debt problem. I determined debt settlement was the answer for many people. Over time the debt settlement division of DTS Financial was 90% of the company and the other financial services we offered became less of a focus.
In 2007 we determined we needed a name that better described our services. It was at that time that we started New Era Debt Solutions.
Question #3 - Your company has already helped to settle millions of dollars in debt. Have you noticed in the past two years that the economic downturn has led to more clients dealing with high amounts of debt?
Back in 2001 our clients had an average debt amount of around $16,000. Over the years we watched our average client’s debt amount climb steadily to $44,412 in 2008. In 2009 our average client had $43,354 of debt and in 2010 the average was $38,899.
I believe one of the reasons that the average debt amount is now declining is because the easy credit that was once readily available has since been reigned in and stopped. I believe because of the current economic downturn that the number of people needing help has increased even though the average debt amount is less.
Question #4 - What kind of a message do you want to get out to consumers who are struggling with debt during these tough economic times?
There is help available but do your due diligence and do your homework. Of the five options available you need to take a suitability test to find out which option is best for you based on your personal situation. Then you need to find a reputable company that specializes in your best option. If debt settlement is an option I would say again that you need to do your due diligence in shopping for a reputable company.
Here is a link to 14 questions you need to ask.
Question #5 - Your website has many testimonials from happy customers. However, are there situations when another option may be a better choice than your debt reduction services?
Debt settlement is not for everybody and many people do not qualify for debt settlement. Sometimes credit counseling is a better fit, and sometimes bankruptcy is a better option. Sometime another option is best. There is not a "one size fits all" option for people needing help with their debt.
Question #6 - New Era Debt Solutions doesn't charge any upfront fees. The website mentions that payment is based upon performance based pricing. Can you explain how this works?
Our goal is for people to be comfortable with the fees they are paying. Because people are different, we offer a choice of fee structures. New Era Debt Solutions has two different fee structures available, of which both of them are performance based.
The first is based on a flat percentage of the debt amount when it is entered into the program. The second is based on a percentage of the savings once the account has been settled. In either case there is no fee whatsoever until after New Era settles the debt. In other words New Era must perform first before there is ever any fee of any kind.
Question #7 - One of the most frustrating things for consumers in debt is those harassing phone calls that they get from creditors and debt collection agencies. How does your company help to put an end to these frustrating and sometimes abusive calls?
I wish we could promise that we could stop all collection calls. Although other companies make that promise; that is simply not a promise they can keep. Collectors have a right to call and they will call.
However they do not have a right to be abusive. If that happens the collector is breaking the rules of the FDCPA and a complaint should be filed. New Era will assist any client in stopping any and all abusive creditor calls. The best and most certain way to stop creditor calls is to allow New Era to settle that debt with the creditor.
Question #8 - Your program requires a minimum monthly deposit of $380.00. How is this money used and are consumers stopping payment on their debts to deposit this money each month?
Our program requires a minimum payment, usually around 1½% of the debt amount. (Not $380.00) This money is deposited in an FDIC Insured trust account under the client’s name earmarked for settling the debt.
Regarding whether or not consumers should stop payment on their debts; have you ever tried calling a bank for assistance when you see trouble ahead?
They will tell you they can’t help you until you are behind on your payments. This is bank policy and this is bank rules. Unfortunately, a creditor will not negotiate on an account that is current. Most consumers would prefer to pay back 100% of what they borrowed if they could. But if they can’t afford the payments and they do not want to file for bankruptcy, consumers are left with few options.
New Era will negotiate with their creditors to reduce the amount of money they owe based on what they can afford. Most consumers feel better about paying something, and the banks would rather receive something than nothing at all from a bankruptcy.
Question #9 - Some programs may help clients eliminate debt but leave negative marks on the consumer's credit report along the way. Does your program result in any negative marks on the credit report of those you are helping?
A person’s credit-worthiness is determined by two factors - credit score and debt-to-income ratio. Falling short in either of these categories could prevent a lender from extending credit to you.
This means that even if you have a good credit score, but too much debt, the banks won’t consider you credit-worthy. So a person can have a good credit score, but still have poor credit. When you begin your debt relief program your credit score may decline temporarily; but as you progress through your program, your debt-to-income ratio will improve. Once you are done with your program, your debt-to-income ratio will have improved dramatically because you have paid off your debt!
By staying current on your other obligations like your mortgage or car payments, your credit score will continue to improve. Shortly after you are done with your program your higher credit score combined with the fact that your debt has been paid down means your overall credit will be greatly improved.
It is important to understand that any type of debt relief program will have a negative consequence on your credit score initially. One of the quickest ways to improve your overall credit is to pay off your debt. It is our goal at New Era Debt Solutions to help you get out of debt quickly while saving you money and improving your credit.
Dan is a busy man and we really appreciate that he took the time to talk to us!
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