The pressure of increased debt is already being felt in the economy. As consumer debt mounts,

Americans will seek solutions to help them deal with their increased indebtedness. Debt

Settlement USA expects to see a 40 percent increase in the number of consumers in 2008 that

turn to debt settlement as the best solution to help them deal with financial hardship. Legitimate

debt settlement companies can help people avoid bankruptcy and get out of debt efficiently and

expeditiously by negotiating a settlement for a portion of the debt with their creditors.

Debt Settlement USA emphasizes the critical need to establish standards within the debt

settlement industry now in order to protect consumers from fraudulent and unethical debt

settlement practices. According to Debt Settlement USA, consumers and creditors should review

the practices of debt settlement companies prior to entering a debt settlement agreement. A

legitimate debt settlement company should meet the following guidelines:

• Have written policies and procedures.
• Be a member of the Better Business Bureau.
• Have comprehensive “Debt Settlement Company Certification” documentation similar towhat creditors may require for their collection agencies and other vendors.
• Have an open door policy as to regulatory agencies and vendor certification for creditors.
• Have an in house attorney with significant credit industry compliance experience and a customer dispute resolution review process.

The CDI is calculated each quarter by adding the quarterly average of the U.S. Department of

Commerce’s monthly Consumer Price Index, the Federal Reserve’s quarterly average of

consumer credit outstandings, and the Federal Reserve’s quarterly mortgage delinquency and

unsecured consumer loan delinquency rates. Consumer credit outstandings reflected in the CDI

include revolving and non-revolving short or medium term credit to individuals, excluding loans

secured by real estate. The mortgage delinquency rate reflected in the CDI is based on real estate

loans including loans secured by one to four family properties, including home equity lines of

credit. Unsecured consumer loan delinquency rates include credit cards as well as other personal

consumer loans.

Debt Settlement USA, Inc. is the leading debt settlement company in the United States, offering

an honorable and ethical alternative to bankruptcy. Located in Phoenix, Arizona, the company

currently serves over 17,000 clients, and has settled nearly $140 million in balances since

inception in 2003. On average, Debt Settlement USA settles clients’ debts for 45 to 55 percent of

the outstanding balances that are brought into the program within a period of one to three years.

percent since the end of  the first quarter and nearly 32 percent since the second quarter of last

year. The CDI’s second quarter increase reverses a steadying trend experienced between the first

quarters of 2007 and 2008.

The CDI is a statistical analysis developed by Debt Settlement USA to measure key economic

When a client of Debt Settlement USA has saved sufficient funds to begin negotiations (usually 40-50% of each debt), they contact their primary debt negotiator to begin the negotiation process.  Reaching a settlement usually takes several phone calls between DSUSA and the creditor, and there relationships, which have been established between our negotiators and the creditors with whom they negotiate also come into play.

It’s important to remember the following key components:

• While your DSUSA negotiator strives to achieve the best settlement offer, your creditor also has specific goals, which must be met to satisfy their financial bottom line.  Have you ever noticed that creditor calls increase significantly at the end of every month?  Your creditors are hungry and will seemingly use every tactic in the book to obtain payment from you.  This is why the art of negotiation is best left to those who have years of experience.
• Many creditors will offer a settlement offer at a higher percentage to entice consumers to take the deal.  However, if your creditor offers an initial 70% settlement offer and your negotiator knows that this creditor with whom they have worked over the years will settle at a lower percentage, trust is another key component in the client/negotiator relationship.  It’s not unusual for a client of DSUSA to receive a phone call from their negotiator the following month revealing a significantly lower settlement offer.  Patience is another key component.  Although it’s tempting to take the first offer, waiting an extra month or so creates a win-win for everyone involved and you, as the client, has saved a significant amount of money!
• Not every situation is win-win.  Despite your negotiator’s best efforts, your creditor can choose to take a more aggressive stance, and pursuant to the terms of your signed agreement with DSUSA, creditors can choose to litigate to obtain payment.  Settlement offers will typically begin at a higher percentage.  However, if a client is unable to meet the higher percentage, negotiation plays an important as payment arrangements can be negotiated prior to litigation.

The negotiations staff at DSUSA counts on your active partnership and cooperation to assist them in their negotiation efforts.  Regardless of how much or how little you owe, debt pressures can be overwhelming.  Stay focused on your goal to become debt free and trust the relationship, which has formed between you and your negotiator.