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BACK FROM THE BRINK!
WIDOW AVOIDS BANKRUPTCY WITH
NEW APPROACH TO DEBT
Pasadena, CA, August 7, 2001-A year ago, Jane Smith was the unlikeliest candidate for home ownership. Her husband of sixteen years had just died. She was out of work. Her credit cards and those of her deceased husband were overloaded with debt. Their prior enrollment in a debt-counseling program had gone on their credit records, frightening off any mortgage lenders that might have considered her.
Today, Jane is employed and has founded her own successful business. She drives a new car and recently purchased a modest one-bedroom condominium in South Pasadena. Smith no longer has any credit card debt to speak of and the debts of her husband have been settled as well.
Smith's fast turnaround from the brink of bankruptcy to relative financial security is attributable to several factors; her own determination to survive, marketable job skills and a financial service known as debt mediation or debt settlement which negotiated the reduction of her outstanding credit card debt to pennies on the dollar.
The Smiths' struggle with debt started before there was any hint of Bob Smith's illness.
The couple had accumulated credit card balances of some $10-15,000 in the normal way; impulse purchases, "good deals", or too much "month" at the end of the budget. "Even though we had never missed a payment, we could not qualify for a home loan which was our goal," Jane recalls, "It seemed no matter what we tried, the debt never went away."
Seeking help, Bob and Jane went to a local non-profit agency which put them on a three-year debt management plan, or "DMP" for short. The couple cut up their credit cards and agreed to one monthly payment the agency would disperse among their creditors. Though not an immediate problem, their credit was unexpectedly stained when notification of the debt-counseling program was posted to their credit records.
Some months later, the Smiths received an incredible offer. One of Jane's talents was in turning around difficult children. Bob, trained in religious counseling, worked with adults. They were invited to deliver their services in upscale Hope Ranch, Santa Barbara, while living nearly rent-free in luxurious home overlooking the coast. It was an offer they couldn't refuse!
For two years all went well until Bob, never sick a day in his life, came down with laryngitis in the fall of 1998 and was unable to continue working. A local doctor ran tests thinking the condition might be the result of flu. Unfortunately, a phone call two days after Christmas delivered bad news--Bob had cancer.
Overnight the couple's lives turned upside down. Caught without health insurance and with Bob unable to work, the couple scrambled to secure the medical treatments he needed. Although they had kept pace on their debt repayment plan, the stain on their credit severely limited any new credit card borrowings.
Undaunted, Jane Smith contacted friends for help and they relayed the message to others. Many donations were received, with some health practitioners even donating their services. Good news came twelve months later when Bob's cancer went into remission. With his playful sense of humor once again brightening the household, the Smiths set about the grim task of financial recovery.
Due to the time needed for Bob's recuperation, the couple gave up their dream jobs and move to a one-room cabana apartment to save money. Despite the upheaval in their lives, the credit-counseling agency rotely called for payments under the original DMP. The choice between making such payments and providing treatments needed by her husband was "no decision" Jane remembers. So, the Smiths abandoned the counseling program and sought another solution.
"Bankruptcy is not something I would ever voluntarily consider," states Jane Smith, "but it seemed there might be no alternative. We had accumulated about $40,000 in credit card debt, while our income had been limited by my ability to work and care for my husband at the same time." Fortunately, a friend brought up another possibility.
"I called The Debt Solution, a company she recommended. Duane Anderson, one of the company's founders, was assigned as my counselor. He was quite compassionate about out situation as he, too, had survived financial straits. His explanation of their service made sense and instinctively I trusted him. To show you what I mean, Duane and his family personally helped us move from Santa Barbara to a smaller apartment. This is not part of the regular service!"
Debt mediation is a distinctly different service from debt counseling or debt consolidation which applies particularly to consumers under hardships such as divorce, loss of work or ill health. In debt mediation there is no debt management plan as in debt counseling. There is no refinancing of debt as in debt consolidation.
Instead, after reviewing their budget with Duane, the couple agreed on an affordable monthly payment to be set aside for the lump sum settlement of specified debts at a reduced amount. Jane and Bob then signed a power of attorney agreement giving Anderson the right to negotiate debt settlements on their behalf. Integral to Duane's success was contacting the credit card personnel empowered to make settlements, rather than those doing collections, a vital step often overlooked by consumers attempting their own settlements.
"The main benefit I got at the outset," Jane Smith recalls, "is that he completely took this problem away from me at a very stressful time in my life and I never worried about it again. I love and adore Duane for the way he handled the situation."
Jane and Bob's debt settlement process took only about three months with the credit card companies voluntarily agreeing to settlements averaging about 25% of the original debt. Damage to the Smith's credit record was minimal and not enough to block Jane Smith's eventual qualification for auto and home loans. "Although debt settlement is a fee-paid service," she states, "the results have more than justified any expense connected with the process."
The good news of financial deliverance was unfortunately tempered by the worsening of Bob's condition. The onset of inoperable lung cancer led to his death in the summer of 2000.
Today, from the comfort of her new condominium, the contentment Jane Smith feels is mixed with pain and some disbelief. There is pain at not being able to share the new home with her husband, Bob. The disbelief is for her dramatic financial turnaround. Her advice: "Be Willing to seek help and continue to believe you can create a better life. There is hope!"
About The Debt Solution:
The Debt Solution, Inc., headquartered in Valencia, California, provides debt mediation services to qualifying consumers throughout the United States and Canada as a viable alternative to bankruptcy.
The program offered by The Debt Solution differs from traditional debt counseling or debt consolidation. As these do not address the amount of outstanding indebtedness, they are not designed to help individuals who cannot sustain their minimum monthly payments. The program, while voluntary, is closely supervised. It greatly reduces the stress of creditor calls and produces a consumer who is totally debt-free within 24-36 months.
The Debt Solution offers additional services that educate the debt-free graduates to manage their incomes wisely, attain financial responsibility and live prosperous lives of wealth accumulation.
For more information on the Debt Solution call (866) 863 - 5544 or visit www.thedebtsolution.com.
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