In these hard economic times, one business that is sure to flourish is the debt settlement business. To enter and be successful in this business, you need to know the ins and outs of debt settlement. Apart from having great negotiating skills – you need this to negotiate with the creditors – you need to be financially savvy as well. You need to know all the tax consequences and other issues on which your clients will question you.
It is a great business to be in as it is recession proof and you charge a percentage of the debt you help settle as your fee. In other words, the greater the debt, the more you earn from your clients.
Work at a Debt Settlement Firm
If you are unsure of how to proceed, first work with a debt settlement company and learn the ropes before you venture out on your own.
There are laws that require you to obtain a license and fulfill bonding conditions if you collect fees for debt settlement negotiation. So it is best if you tie up with a back end debt negotiator that will meet these legal requirements. These companies will then open a bank account and collect the fees to compensate you for your services. This system works best at least in the initial stages of your business. In case you want to do away with back end companies, consult an attorney and get the requisite licenses.
You can become an accredited member of national or regional debt settlement organizations. This will lend more credence to your ability to negotiate a debt on behalf of your client. Your clients too will be confident that you are up-to-date with all the latest developments in this field.
Apart from being a certified debt professional it helps if you are also a certified financial planner or have other financial certifications. It is important that both the debtor and the creditor trust you and your judgment for you to be able to negotiate a deal successfully. These certifications help toward building this trust.
Always approach only those debtors who are close to bankruptcy when you offer potential clients your services. This is because debt settlement affects the credit rating of a person entering into it. Those who are about to file for bankruptcy are already close to losing their credit rating and will not mind a debt settlement plan instead.