Debt settlement clients are typically instructed not to speak to their creditors directly. Instead they are told they should tell the creditors to call the arbitration company or to simply not answer the calls. Why is this?

The first reason is that if the client continues to speak to the creditors then they have almost no incentive to settle the debt with the settlement company, who is typically able to get a much better deal for the client. Speaking to the creditors therefore causes a delay in the process and may even prevent settlement ever happening.

The second reason is that talking to creditors can easily reveal information that can make the situation much worse. If income or asset details are revealed to the creditor these details can easily lead to a lawsuit. The more the creditor knows the less the settlement process will work as debt settlement is a battle between a very informed settlement company and a creditor who se knowledge is limited of the client’s full situation.

Lastly, creditors have many tricks which can be used against a client to make them terminate the settlement program. Unsecured debt creditors collect debts using fear tactics. Telling people their credit will be ruined “forever” or “we will take your house if you don’t pay” is an extremely common tactic which uses falsehoods to strike fear. Taking the actions the creditor suggests can the easily make the client’s situation much worse and much more expensive than it just was. Whether a client settles a debt for 100% or 50% can often benefit them very little or not at all, but can cause great further hardship to someone who may already be struggling as it is.

In general, debt settlement is a service that should best be left to the experts. Once the program begins the client must realize that the settlement company has the interests of the client in mind more so than a creditor, whose primary motive is to get as much money out of the client as possible.