Those of you using my Business Plan System know I am a proponent of only working commercial debt cases rather than personal debt cases. There are a few reasons for this.
First, there are a number of consumer protection laws and requirements for debt negotiators representing individuals. These can be cumbersome and complicated requiring lengthy disclosures to all parties involved. Commercial (or business related) debts do not typically carry this requirement.
Second, emotions usually run higher for both creditor and debtor for personal debts making a discounted settlement much more difficult. If the creditor is an individual, they often won't rest until the debtor (be they a person or business) feels the "pain" of having to pay in full. Similarly, if the debtor is an individual, they may have too many personal feelings attached to making a payment of any kind. For the most part, business owners on both sides are more interested in getting back to running their businesses and would rather just put the matter to rest as quickly as possible.
Third, debtor individuals may have fewer resources available to make a settlement payment and pay the debt negotiator's fee.
Although anyone in this profession may work either type of debt case if they are properly equipped, I recommend sticking with only commercial debts to make the best use of time and resources. The cases are numerous, the dollar amounts are often larger and the fees are usually easier to collect.
Scott F. Soape
Thursday, May 29, 2008
Thursday, May 22, 2008
Ethics - Dealing with Colleagues
A recent event I experienced has compelled me to address the issue of ethics as they relate to dealing with other commercial debt resolution professionals. I will address other specific ethics related topics in subsequent writings on an ongoing basis.
Last week, I received a call from an individual asking about my Business Plan System for the commercial debt resolution business. After a while, he indicated he was not only interested in the program but was also a business owner with some debt problems. Through the course of our phone conversation I attempted to address his questions as best I could and explained the business and how I operate as plainly as possible. He sounded genuinely interested and asked if I could email a sample of my contract so he might consider retaining my service to resolve his problem debts (and continue to consider my training program).
After I sent him the requested sample contract, I began to suspect something didn't quite feel right about the conversation. A quick Internet search verified my suspicions. This person turned out to be the husband of a fellow debt negotiator in California.
It seems they had come across my firm on-line and were simply fishing around for information about my business. Apparently, the husband thought he could pull off his telephone impression of James Bond and garner some proprietary information about how I conduct my highly successful practice in order to help out his wife's business. Unfortunately, his clumsy attempt at corporate espionage failed and he was "busted" before I released any special information.
Sadly, had he or she simply called and inquired honestly about my practice, I would have been more than happy to share my information.
Unfortunately, this profession is populated with a few unprofessional and dishonest individuals, so it is important for the rest of us to conduct our business at the highest ethical standards with clients, creditor's agents and EACH OTHER. Sharing information with colleagues should not pose a threat since there is already more business available than we can all handle anyway. In the 10 + years I have been in this profession, I have never crossed paths with this other company and I doubt I ever will in the future (certainly not if I can avoid it).
I hope everyone involved in this business will feel free to share ideas, techniques and success stories with our colleagues. An atmosphere of openness can only serve to help our overall industry and business practices. After all, although most of us are fiercely independent, we are all in this together.
Scott F. Soape
Last week, I received a call from an individual asking about my Business Plan System for the commercial debt resolution business. After a while, he indicated he was not only interested in the program but was also a business owner with some debt problems. Through the course of our phone conversation I attempted to address his questions as best I could and explained the business and how I operate as plainly as possible. He sounded genuinely interested and asked if I could email a sample of my contract so he might consider retaining my service to resolve his problem debts (and continue to consider my training program).
After I sent him the requested sample contract, I began to suspect something didn't quite feel right about the conversation. A quick Internet search verified my suspicions. This person turned out to be the husband of a fellow debt negotiator in California.
It seems they had come across my firm on-line and were simply fishing around for information about my business. Apparently, the husband thought he could pull off his telephone impression of James Bond and garner some proprietary information about how I conduct my highly successful practice in order to help out his wife's business. Unfortunately, his clumsy attempt at corporate espionage failed and he was "busted" before I released any special information.
Sadly, had he or she simply called and inquired honestly about my practice, I would have been more than happy to share my information.
Unfortunately, this profession is populated with a few unprofessional and dishonest individuals, so it is important for the rest of us to conduct our business at the highest ethical standards with clients, creditor's agents and EACH OTHER. Sharing information with colleagues should not pose a threat since there is already more business available than we can all handle anyway. In the 10 + years I have been in this profession, I have never crossed paths with this other company and I doubt I ever will in the future (certainly not if I can avoid it).
I hope everyone involved in this business will feel free to share ideas, techniques and success stories with our colleagues. An atmosphere of openness can only serve to help our overall industry and business practices. After all, although most of us are fiercely independent, we are all in this together.
Scott F. Soape
Tuesday, May 20, 2008
Unlicensed Practice of Law (UPL) Risk
It is extremely important in this profession that you make clear to all parties you are not an attorney and cannot provide legal advice (unless, of course, you happen to be a lawyer). Those in the legal profession take this very seriously and some can be quick to accuse a careless debt negotiator of UPL.
Since starting my practice in 1997, I have never had a problem with this. All of my correspondence includes a disclaimer indicating I am not an attorney and I preface all my initial conversations with prospective clients and creditors' agents with this same information. I strongly encourage everyone in this profession to state this as obviously as possible in all business related communications.
However, this is not always enough. Since we are often dealing with debts that have escalated to lawsuits, our clients may look to us for guidance with their cases. Be careful that you do not give advice that could be construed as "legal advice". Be clear that you only specialize in negotiating discounted out-of-court settlements and you should not have any problems with UPL accusations.
As an additional service, I also suggest that you check your area for 1 or 2 reputable civil defense lawyers as referrals for any of your clients that you are unable to help with a settlement. This may not earn you any fees but it goes a long way in "good-faith" relations with your clients and may get you a referral from a happy one later.
Following these guidelines and using the wording provided in my sample correspondences will help ensure you a long and profitable career in this exciting profession.
Scott F. Soape
Since starting my practice in 1997, I have never had a problem with this. All of my correspondence includes a disclaimer indicating I am not an attorney and I preface all my initial conversations with prospective clients and creditors' agents with this same information. I strongly encourage everyone in this profession to state this as obviously as possible in all business related communications.
However, this is not always enough. Since we are often dealing with debts that have escalated to lawsuits, our clients may look to us for guidance with their cases. Be careful that you do not give advice that could be construed as "legal advice". Be clear that you only specialize in negotiating discounted out-of-court settlements and you should not have any problems with UPL accusations.
As an additional service, I also suggest that you check your area for 1 or 2 reputable civil defense lawyers as referrals for any of your clients that you are unable to help with a settlement. This may not earn you any fees but it goes a long way in "good-faith" relations with your clients and may get you a referral from a happy one later.
Following these guidelines and using the wording provided in my sample correspondences will help ensure you a long and profitable career in this exciting profession.
Scott F. Soape
Wednesday, May 14, 2008
An Actual Recent Case
Locating cases, obtaining clients, negotiating settlements and getting paid can be a very simple and quick process in the commercial debt resolution profession.
As an example, on April 15th I identified a potential case lead at the local civil court records division of the county court. The debtor business had been sued by a local phone book for not paying on their yellow pages listing and the plaintiff was asking for $11,755.20 in principal, $3,900 for attorney fees, reimbursement of court costs (usually about $275) and post judgment interest on the entire debt until paid.
I immediately sent a letter offering my service to the owner of the business listed in the lawsuit at the address indicated. I followed up a few days later with a phone call and discussed my service. The owner expressed an interest but wanted to think it over first. On April 25th, he called me back and I faxed him a contract.
Since I knew from years of negotiating with the attorney representing this plaintiff (creditor) that a discount would be tough to get on the debt, I set my fee at a flat $350. It was also clear this business had very limited resources and a higher fee might be hard to collect.
After a phone call and 2 emails to the attorney, I had a final settlement offer of $12,000.00 payable in 24 monthly installments of $500 each (basically a 2 year loan with no interest). The client accepted the settlement on May 1st and I received a check for my fee immediately thereafter.
The total turn around time from identifying a lead to getting paid was just over 2 WEEKS but took only about an hour of actual hands-on work time for me.
This is just one example and the fee was set at my absolute minimum but you can see the results.
By the way, my client told me he had been contacted by another debt negotiator who offered to work for 35% of whatever he could save the business on the debt. I had intentionally set my fee as I did knowing I had competitors and knowing what to expect in the way of a final settlement. This helped me win the business.
My commercial debt resolution Business Plan System will teach you everything you need to know to operate your own business in this highly profitable profession. Please visit my website at http://www.debtresolutionbiz.com/ for details.
Scott F. Soape
As an example, on April 15th I identified a potential case lead at the local civil court records division of the county court. The debtor business had been sued by a local phone book for not paying on their yellow pages listing and the plaintiff was asking for $11,755.20 in principal, $3,900 for attorney fees, reimbursement of court costs (usually about $275) and post judgment interest on the entire debt until paid.
I immediately sent a letter offering my service to the owner of the business listed in the lawsuit at the address indicated. I followed up a few days later with a phone call and discussed my service. The owner expressed an interest but wanted to think it over first. On April 25th, he called me back and I faxed him a contract.
Since I knew from years of negotiating with the attorney representing this plaintiff (creditor) that a discount would be tough to get on the debt, I set my fee at a flat $350. It was also clear this business had very limited resources and a higher fee might be hard to collect.
After a phone call and 2 emails to the attorney, I had a final settlement offer of $12,000.00 payable in 24 monthly installments of $500 each (basically a 2 year loan with no interest). The client accepted the settlement on May 1st and I received a check for my fee immediately thereafter.
The total turn around time from identifying a lead to getting paid was just over 2 WEEKS but took only about an hour of actual hands-on work time for me.
This is just one example and the fee was set at my absolute minimum but you can see the results.
By the way, my client told me he had been contacted by another debt negotiator who offered to work for 35% of whatever he could save the business on the debt. I had intentionally set my fee as I did knowing I had competitors and knowing what to expect in the way of a final settlement. This helped me win the business.
My commercial debt resolution Business Plan System will teach you everything you need to know to operate your own business in this highly profitable profession. Please visit my website at http://www.debtresolutionbiz.com/ for details.
Scott F. Soape
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