Has anyone used ZipDebt, Charles Phelan’s debt settlement program?
I am looking into debt settlement and I am leery of the fees and ethics of the various companies that are out there. I find mixed reviews on all of the larger ones. Anyway, Charles Phelan’s do it yourself plan is intriguing and other people have reported here that they have been able to settle their own debts with their creditors. I feel that I need some guidance but I also want to feel ultimately responsible for and empowered during the process, so the ZipDebt program SOUNDS like the best option but I’d like feedback from anyone who has used it.
Charles Phelan here. In response to the original inquiry, you should only use the debt settlement approach if you would otherwise be stuck with Chapter 13 bankruptcy. This removes the objection about credit damage, as both settlement and bankruptcy are damaging to roughly the same extent. (And both can be recovered from.)
In response to the answer above, a few corrections. I have 3 program levels, $197, $397, $777, depending on the level of coaching support desired by the client. As to point 2, this is the typical response from someone who thinks they know about debt settlement. There is WAY more to it than this over-simplified explanation, and again, it’s only an appropriate strategy if you can’t continue with normal minimums anyway.
And yet again, there’s the 1099-C objection with no mention of the insolvency exemption. Consumers with negative net-worth at time of settlement may legitimately exclude the 1099-C amount from taxable income up to the amount by with they were insolvent at the time of settlement. Translation: Most debt settlement clients don’t have to pay tax on the forgiven balances.
Finally, you won’t be successful doing debt settlement based on a “book from the library.” Yes, the basic idea is easy enough: haggle until you get a deal! But knowing in advance which creditor will settle for what percentage adds tremendous confidence and power in the negotiation. Would you hop into a car in a foreign country and try to drive cross-country without a roadmap and when you don’t know the area at all? Makes sense to get some directions!
Do It Yourself Debt Settlement
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