Fees

Over the years, I have become more and more in favor of flat fees as opposed to fees based on a percentage of savings.

Most commercial debt resolution specialists will charge a fee of 35% of the amount they save a client on a debt. If they save a client $10,000, their fee will be $3,500. (The 35% figure probably stems from the practice of attorneys charging 1/3 of the amount their client collects in a lawsuit.) I have three problems with this practice in our business. First, the percentage is too large and depletes the actual savings to the client far too much. Second, it has the potential to create a new problem debt for the client. Third, the fee is completely unknown until negotiations are finished and could be an unpleasant surprise to the client.

When a creditor's attorney charges 1/3 of the amount they collect from a debtor, they simply shave that amount off the funds as they are received with no out-of-pocket cost to their client. When debt negotiators collect 35% of the amount they save a client, the funds must come from the client's pocket... even as the client pays whatever settlement is negotiated.

For these reasons, my preference has become the flat fee for most cases. There are no surprises and the client must still approve any settlements before they are accepted. I also have found using a flat fee gives me an edge over my competition. There is a very simple calculation I use for my flat fee cases and I am happy to share this with any of my students. Please feel free to contact me.

However, I still use percentage fees for some cases such as debts tied to a business and / or real estate being sold. These fees will come from the proceeds of the sale with no out-of-pocket cost to the client. They can also be extremely lucrative providing revenues in the tens of thousands of dollars.

Scott F. Soape

Free Credit Reports

Everyone is entitled to a FREE annual credit report from the primary credit reporting agencies and you may want to advise your clients of this. Reviewing these reports allows people to spot errors and verify what is being reported to creditors. It also helps to prevent fraud.

Although the frequent TV commercials you may have seen with the catchy tune asks folks to go to a different web site, the official web site for this truly FREE request is www.annualcreditreport.com. People may request a free report from each of the 3 agencies every 12 months. They may also request a credit score at a nominal charge, but this is not required.


Since there are 3 different credit reporting agencies and you can only get 1 report from each per year, I always recommend my clients request one report from each company every 4 months. This allows the company to make any changes needed with time for them to be reflected on the next requested FREE report from one of the other companies. Four months after the 3rd report is received, they can request a report from the 1st company again since 12 months will have passed. Staggering requests for FREE credit reports in this manner provides a snapshot of an individual's credit standing on 3 occasions throughout each year.

Of course, doing this yourself is always advisable and it will also help you get familiar with the reporting formats in case clients have any questions about their own credit reports.

Scott F. Soape

Consumer Credit Counseling

You will undoubtedly encounter situations where a business owner also has some problem personal debts along with their commercial debt during your career as a debt resolution specialist. As you may know, I always suggest you avoid these "retail" cases for various reasons, not the least of which are the complicated and cumbersome consumer debt protection regulations.

An excellent tool to use for these cases is the "National Foundation for Credit Counseling" and their web site is www.nfcc.org. Members of this organization have been screened and approved to provide credit counseling services to individuals. Prospective clients can easily enter their zip code on the search page to find service providers in or near their area, or they can search for help through the Internet. Counseling services are always low cost and sometimes even free.

By referring individuals to this organization for their problem personal debts you will solidify your position as a trusted professional, avoid pitfalls in working these cases and truly add value to your service.

Scott F. Soape

Electronic Correspondence

A student recently pointed out that my material does not completely address the use of fax and email in communicating with clients and creditor agents. I always appreciate this kind of feedback and I am updating the program to include this information but thought I would also address this issue here.

The use of fax and email for official correspondences (such as contracts and settlement offers) is widely accepted these days and will typically hold up if challenged in court. This is often desirable in order to expedite communication with clients and creditor agents especially when deadlines are imminent.

I also will use email to offer my service to prospective clients whenever I can locate a direct email address for a company owner. These can often be found with a Google search for a company web site. Sending my powerful "Prospect Letter" via email greatly speeds up landing clients.

Incorporating fax and email for correspondence into your commercial debt resolution practice will result in quicker settlements and quicker fee payments.

Scott F. Soape

"The Harder I Work, The Luckier I Get"

The above quote is something my father used to say. It may not be completely original but, over the years, I have found it does make sense. Whenever I experience a special success in my business, I can usually relate it to some extra effort I previously put in to get there.

The commercial debt resolution profession is not one of those "sit back and wait for the checks to arrive" phony business opportunities. It is a very real profession that requires real efforts to achieve a high level of success.

My Business Plan System provides my students with all the information needed to work this business. However, it is entirely up to each individual to decide exactly how much time and effort they are willing to invest to reach the level of results they desire.

The cases are plentiful and arise by the hundreds daily around the country... but you have to get them.

As with most worthwhile endeavors, the more you put into building your business, the more you will get out. Other people may just think you are "lucky" when you succeed, but you will know the real reason for your success is your hard work.

Scott F. Soape

Build Referral Relationships

As your commercial debt resolution practice grows, you will want to constantly cultivate outside referral relationships to ensure a steady stream of qualified leads. My complete Business Plan System shows you how to do this.

CPAs, bankers, bookkeeping services, business brokers... anyone you can think of that might encounter businesses having financial troubles. ALL of these folks can steer debt resolution cases your way.

Set up a regular marketing program to notify these people of your "risk free" service for their contacts. You may not see the fruits of your labor for some time but, be assured, the cases will be forthcoming. Sending at least a quarterly letter, flyer, brochure or email will keep your name at the front of their mind whenever a situation arises.

Your service will be an arrow in the quiver of these other professionals to assist their clients.

Although some professionals will not take advantage for many reasons, be sure to offer a sharing arrangement for any earned fees from referred cases.

Building a broad and varied network of referral relationships over time will keep your pipeline full of new cases.

Scott F. Soape

BBB Warning

Following is a recent BBB warning...


"Dealing with Phony Debt Collection Calls

Recently several local consumers have notified BBB about phone calls from individuals pretending to be debt collectors and threatening them with legal action or arrest. The consumers are told they must pay a supposed outstanding debt over the phone immediately. In some cases, the callers have social security numbers, bank information and the consumer’s address. BBB wants you to know what to do if a stranger calls claiming you owe them money.

4 Tips to Help You Fight Debt Collection Scams:

1) Ask Questions About the Debt

2) Request Written Proof

3) Don’t Give or Confirm Any Personal Information

4) Tell BBB and the FTC

Have you run across a scam? Be sure to follow us on Facebook and Twitter for the latest trends, tips and to let us know if you have any topics you want BBB to address."

FREE Leads!

One of the most common questions I get from people looking into the commercial debt resolution profession is: "How and where do I locate prospective clients?"

I always know part of their concern is the potential expense of advertising in order to draw in business.

The great news is: "No advertising is needed to get started and... leads are typically FREE to locate and obtain!"

I always advise people new to this profession to start by checking their local court systems for recent lawsuits involving one business suing another for monetary damages. These cases arise all the time, all over the country and, since they are PUBLIC INFORMATION, they are usually FREE to view. The lawsuits will indicate the parties involved including names and addresses, a brief description of the dispute and the dollar amount of the claim. Basically, everything we need.

The added benefit of these situations is their URGENCY. Typically, the defendant (debtor business) only has a short time to respond or they risk a default judgment being issued against them. This typically requires paying an attorney hundreds to thousands of dollars, win or lose. When we offer to negotiate a discounted, out-of-court settlement on their behalf... on a no results / no cost basis... their choice becomes easy.

Of course, my complete Business Plan System provides ALL the information needed to locate these cases, contact the debtor businesses, offer the service and negotiate successful settlements.

There are also MANY other ways to bring in business and these are all covered in my program. But the fastest, least expensive and most productive way to get started is through the court systems. Often, this information is even available on-line.

Scott F. Soape

A Rewarding Career on More Than One Level

There is no question this profession has the ability to provide a substantial ongoing revenue stream from earned fees.

What is harder to express and identify is the psychological rewards that come from helping clients who are experiencing a difficult financial time.

Heavy handed collection agents often refer to debtors as "dead beats" in an effort to place them in an unflattering light so they can justify their collection tactics. I think you would find this attitude is surprisingly prevalent in the boiler-room collection call centers around the country. It helps the collection agents live with what they are doing.

In my many years in this profession, I have found the majority of debtor business owners simply find themselves confronted with circumstances beyond their control. Most have every good intention of paying their debts in a timely manner but, for many different reasons, are unable. Sometimes it is due to poor financial management but more often these businesses are waiting to be paid by other businesses before they can, in turn, pay their own bills. It does not take long for the domino effect to begin.

The emotional reward for assisting these business people in keeping their doors open for business can be as great as any earned fee. As a commercial debt negotiator, you are truly one of the GOOD GUYS.

Scott F. Soape

New FTC Rule for CONSUMER Debt Settlement

Once again the CONSUMER debt settlement industry has drawn the attention of regulators.

Thankfully, this rule does not apply to our Commercial Debt Settlemment industry. You may click on the below link to view an Associated Press article by Candice Choi for the full story...

New rule cracks down on debt settlement industry

Keeping Records

Once you become a professional commercial debt resolution negotiator, you will quickly realize the importance of keeping thorough records.

Start by creating a file for each client as they retain your service. I like to record the primary contact information for my client on the inside cover of the file folder for quick reference. Keep copies of all contracts and other documents for each individual case in this file (multiple cases for one company are common).

You will also want to make notes of each and every conversation relating to a debt settlement. Date, time, name and summary of the conversation can be essential if there is ever a disagreement or failed memory by a party to the case. Always keep a clean legal pad handy for notes.

Additionally, as you work more and more cases, you may find you are dealing with the same commercial creditor and / or the same creditor agent. Keeping track of the past (or best) settlement terms will give you an edge for later negotiations.

Having the ability to review records of your past cases or even just recent communications with clients or agents will allow you to operate efficiently and professionally in a fast paced environment.

Scott F. Soape

Debt Settlement Firms Under Scrutiny

An article in today's New York Times by Peter S. Goodman reports on the negative aspects of the consumer debt settlement industry. Specifically, Mr. Goodman relates the pitfalls of companies that offer to cut credit card debt for individuals. A copy of the article can be viewed online at www.nytimes.com under today's business section (you can submit a search under "Peter S. Goodman"; the article is titled "The New Poor, Peddling Relief, Firms Put Debtors in Deeper Hole ...").

This information further supports what I have been telling people for a long time... it is best to AVOID consumer / retail / individual debt resolution.

By dealing with COMMERCIAL clients only and by using my "no results/ no charge" program, you will not have to worry about the concerns outlined in the article. And, you will be able to build a long term, lucrative, HONEST, professional practice.

Scott F. Soape

A Recent AVERAGE Case

On May 20th a new client retained my services to negotiate a discounted out-of-court settlement on his company's behalf based on an email I had sent him. His business had been sued by an insurance company that had provided worker's compensation insurance. My client had not paid premiums as billed and was sued for $10,251.

That same day I sent a low-ball settlement offer to the creditor's attorney. Within a day, I received a response declining the offer along with information indicating the attorney would be taking the following week off and granting an extension to the answer date on the lawsuit.

By the way, this creditor files many lawsuits for similar situations in my area on a regular basis. I have dealt with their attorney often over the years and I am familiar with her general guidelines for most settlements. She, in turn, knows that I can be trusted and that I can typically assist in arriving at acceptable settlement terms. My involvement saves her some time and effort with these cases.

Upon the attorney's return from vacation, I sent another offer for a little higher total dollar amount and she quickly countered with the least she would be willing to accept.

I informed my client of the final proposed settlement terms on June 15th and he accepted on June 16th. I received payment for my fee in the amount of $500 today, June 18th.

Within 4 weeks (it would have been shorter if not for the attorney's vacation) I had landed a client and completed a very favorable out-of-court settlement on their behalf... and deposited a check for a nice fee... all with about 3 or 4 quick emails.

In this case, I saved my client $2,251 on the debt PLUS over $3,400 in potential attorney's fees that could have been awarded to the creditor's /plaintiff's attorney. In addition, the settlement was set up on a no interest payment plan over 11 months. ALL parties benefited.

Keep in mind, this is just an average case generating an average fee... and I work these cases all the time.

My complete commercial debt resolution Business Plan System will show you how to do the same thing.

Scott F. Soape

You Can't Win Them All

You will encounter all kinds of past due and disputed debts during your career as a commercial debt resolution specialist. Using my time tested and proven techniques to negotiate discounted settlements for your debtor business clients will result in successful resolutions for most of your cases. However, you will not be able to resolve every case.

Although it is usually in the best interest of BOTH parties to compromise and settle these disputes for an amount less than claimed, some creditors will still demand payment in full without a discount or payment terms.

This is just part of our profession and should not be viewed as failure on your part.

Once you have been informed by a creditor or their agent that they are firm in their demand for full payment, you should quickly notify your client of such. If there is a lawsuit pending, encourage your client to retain competent legal counsel to address the situation as soon as possible. Of course, you will need to quickly refund any retainer you have received for these cases.

Most cases you encounter can be resolved to the benefit of your client (and the creditor business) and substantial fees can be earned for your valuable service. But, do not be surprised or discouraged if you eventually encounter cases that you are unable to resolve. It's just part of the business.

Scott F. Soape

Commercial (NOT Retail) Debt Resolution

A student recently referred me to a debt resolution Internet webinar to which he had received an invitation. The invitation indicated this person had "found a select group of people who are quietly using debt settlement as a "secret" revenue stream to massively increase their monthly cash flow...". The invitation went on to say "collectively, these experts are earning TENS OF THOUSANDS of dollars a MONTH in debt settlement, most PART TIME!" (their emphasis). Of course, "collectively" could mean that 1000 "experts" are only earning $10 or $20 per month, but I digress.

Always eager to learn new or "secret" ways to generate revenues in this profession, I decided to listen in on the webinar.

Sadly, this turned out to be yet another situation where someone has found a way to take advantage of the unfortunate folks who find they have more debt than they can handle. The "secret" revenue stream involved signing people up to reduce their debts on a regular payment plan while skimming a percentage fee for this service off the top of each payment. The only difference was that this program was directed at out of work real estate professionals looking for income ideas.

No real assistance was involved and, if people were to do this themselves, they would pay off their debts much earlier for less money. These so called services have given debt resolution (or settlement) a bad name for good reason and have resulted in increased regulation on the consumer / retail side of the profession to protect vulnerable individuals.

My Commercial Debt Resolution Business Plan System teaches people how to work with BUSINESSES and / or BUSINESS OWNERS to resolve their past due or disputed BUSINESS DEBTS on a case-by-case basis. Fees are agreed upon up-front in a written contract and are earned only for results. They are only paid upon acceptance of each settlement by the business and not skimmed from any ongoing payment plans.

I encourage people to avoid consumer / retail debt settlement situations for many reasons (please see previous related blog posts). This new twist is just the same song with a different tune and should be avoided as well.

With the information from my Business Plan System, anyone can earn substantial, ongoing and HONEST fees in the Commercial Debt Resolution profession.

Scott F. Soape

An Improving Economy Improves Our Business!

You would be right to think that down economic times are good for the commercial debt resolution business. During down times, many debtor companies find themselves unable to pay bills they could otherwise afford. Obviously, these companies need our assistance to work out settlements and / or payment terms with their creditors.

However, when the economy improves and these same debtor companies start to see additional revenues flowing in, our business will also benefit.

Here's why...

If a debtor company has been able to weather an extended downturn in business and keep their creditors at bay, they could be in a position to offer lump-sum settlements to these same creditors when business turns around for the better. Or, they might simply want to set up payment plans to shrink their debts more quickly with their new improved cash flow.

Whether or not the commercial creditor is aware of your client's improved finances, they may still be willing to do whatever it takes to start receiving payments.

Approaching debtor companies with your "NO RISK" offer to settle debts as they are seeing increased revenues can be your easiest cases to land.

Scott F. Soape

Overcoming Objections

I recently had an inquiry from a new student about overcoming common objections and I thought I would share my thoughts here.

Perhaps surprisingly, you will find that many debtor business owners are simply in denial about their past due debts. If they do not have the resources available to pay, they often ignore the demands for payment. Unfortunately, there is not much we can do about that kind of attitude apart from explaining we intend to save them as much as possible and they will have full control over whether they accept or reject the final settlement terms. Usually these folks just ignore all correspondence and phone calls regarding their debts.

Other business owners will have a "come and get me" attitude and just don't care if a judgment is issued against them for a debt. Their rationale is "there are no assets so who cares about judgments or liens". Plus, if the business is incorporated and the owner is not named as a defendant, they can shut the doors and walk away without any personal liability. Again, offering to negotiate a settlement on a no results / no charge basis could land a paying client in this situation... they have nothing to lose and potentially a great deal to gain.

Sometimes a prospective client will indicate they plan to use their attorney. You can suggest these folks allow you to attempt a settlement first and, if you can't reach acceptable terms, they can always use their attorney (nothing to lose).

On rare occasions you might have an objection to your fee. Explaining you plan so save them substantially more than your fee can usually land these clients.

My complete commercial debt resolution Business Plan System provides a powerful sample prospect letter that often results in new clients calling you for assistance. Also included is a sample prospect script to use for your follow-up calls which is usually enough to garner business. Although objections are rare, using the above suggestions to overcome them should help you quickly build a profitable practice.

Scott F. Soape

Disputed Debts

Most cases you work will be due to cash flow problems with the debtor business. Negotiating settlements for these cases simply entails convincing the creditor they should take whatever is being offered or risk receiving even less.

Occasionally, though, you will come across cases where the debtor business disputes the amount claimed to be due, either in part or in total. These cases require a different negotiation strategy. If the debtor business is not willing to pay ANYTHING, it is probably best to move on to another case rather than wasting your time. However if your client is willing to pay at least a portion of the amount claimed to be due, you will have a chance of reaching a settlement.

Ask your client for a dollar amount range they would find acceptable and start your offers with the creditor on the low end. You will quickly know if the creditor is willing to negotiate and take less than the original claim. From there, it is just a matter of a little back-and-forth with counter offers until a final amount is agreed upon.

Disputed debts are a little trickier than other cases but the fees are just as lucrative if you can reach a favorable settlement for your client. My comlete Business Plan System provides guidlines and suggestions for negotiating all types of settlements.

Scott F. Soape

Get The Word Out!

You might be able to provide the greatest commercial debt settlement service in the WORLD! But, you have to let people know.

As the saying goes... not advertising your service is kind of like WINKING IN THE DARK; nobody else knows you're doing it!

Use whatever avenues your budget will allow to spread the word about your unique service. Run small ads in your local newspaper, send information to CPAs, bankers, business brokers and other financial professionals. Set up a WEB SITE. Offer yourself as a source of information to local reporters. Post your business card or a flier on public bulletin boards.

Targeted information sent to defendants of recent commercial lawsuits will always get results. Be sure you also incorporate a broad based advertising campaign into your marketing efforts to ensure an ongoing source of new business outside of court cases.

Scott F. Soape

Negotiating with Creditor Agents

Most of your settlement negotiations will be with creditor agents rather than directly with the creditor business. If a debt is sufficiently past-due, you will probably deal with a collection agent. If a lawsuit has been filed, you will deal with the creditor's attorney. Each of these agents has a slightly different agenda but both will try to get the most money on the debt for their client (the creditor business).

Collection agents are typically paid a percentage of whatever they can collect so they have a vested interest in getting as much as possible. Attorneys, on the other hand, are paid either an hourly rate or a flat fee for their services. In both situations, your job will be to convince them they should be happy with the discounted amount you are offering. Both of these agents know some cash in hand is always worth more than the hope of more cash in the future.

There is no reason to feel intimidated when negotiating with collection agents or attorneys. My Business Plan System provides negotiation techniques that can easily be adapted to any type of settlement, regardless of who you deal with. Using my techniques, you will come across as a veteran professional negotiator from the start.

Scott F. Soape