Some of my clients are hesitant about jumping into the debt settlement business since you have to wait to get paid sometime as long as one to two years to get all of your fees. Is this worth it? Well, if you are adding two to four new clients per week then the answer is a definite yes! After being in the business just a few months if you are working hard and enrolling new clients each and every week then your cashflow from each of these enrollments can make you a fortune.
Here’s an example of the payment schedule from one Back-End Debt Settlement company. Remember, I recommend that the company you work with follow TASC principles. One rule under TASC is that the fees being earned by the DS provider not be collected over less than half the length of the saving program. So on a 24 month program, the fees should be collected from the client’s payment account over the first 12 months.
Let’s look at a payment of fees schedule for a four year program (it was a long program since the client had $115,000 in total debt that needed to be enrolled in the program). The fees were 15% and were paid over 24 months as follows:
Client was enrolled to pay $1,202.27 per month for 24 months into the account.
In the first six months, the fee amount collected to the DS company was $766.66 per month. In the remaining 28 months, the amount of the monthly fee is reduced to $383.33 per month.
So you notice here in the DS business you do have to wait to get paid all of your fees but when we enter this business we enter it for the long term. And imagine once you are adding 2 to 4 new clients each week you will be creating some great cash flow when you are receiving your commission checks on 5, 10, 15, 20 or more active clients – that amounts to real money in your pocket each and every month ….
Stay tuned for a future lesson and keep your questions coming about our coaching program to enter the debt settlement and debt negotiation businesses.