It can be overwhelming to enter a debt resolution program without knowing exactly what to expect. But the clearer you are about what’s happening behind the scenes — and when you can expect results! – the more confident you’ll be.
Read on to discover crucial aspects of the first few months of your journey so you can start feeling excited about your first resolution and the savings to come!
- Why Delay Payments to My Creditors?
- When Will My 1st Resolution Offer Arrive?
- When Will Beyond Finance Contact My Creditors?
Why Delay Payments to My Creditors?
A critical part of the debt resolution process is establishing that you’re experiencing a financial hardship. In other words, creditors need to see proof of your financial difficulties before they’re willing to negotiate with our team and agree on resolutions. The most clear and direct way to establish this financial hardship is by choosing to stop making payments directly to the creditor.
Stopping creditor payments over a period of time is commonly called a “delinquency period.” Creditors know that as more time goes by within this period, the statistical chance that they receive further payments drops until it’s virtually 0%.
This is why you’ll see a ramping up of calls and other collections activity during this delinquency period (some creditors set this at 90 days, others at 180 days). Remember, creditors benefit the most when you return to the cycle of making minimum payments and the compounding interest that goes along with it.
As the likelihood of them receiving payment decreases, they become more willing to negotiate a resolution. At this point, they’d rather collect some amount of the debt rather than none at all.
Sometimes your original creditor will refer your debt to a collections agency to help with the collections process. If you receive an alert that this has happened, it’s normal! Just let our team know — we reach resolutions with these 3rd-party agencies all the time.
When Will My 1st Resolution Offer Arrive?
Unless someone has already stopped payments before enrollment, clients will likely see their first resolution offer arrive 3–6 months into their program. The reason for this is directly tied to that “delinquency period” explained in the section above.
You may notice that the two main delinquency periods — 90 days and 180 days — directly link to the typical 1st resolution timeline: 3 months – 6 months.
After this period elapses, the creditor has the proof they need that you’re experiencing a financial hardship. Our team is also now able to point to your growing Dedicated Account, and say “Our client is steadily making deposits and if you accept, they can repay a portion of the amount owed over this amount of time.” This is why we’re usually able to negotiate a client’s first resolution so quickly after the delinquency period ends.
Once in a while, a client may have to wait longer than 6 months to see their first resolution. This is almost always because our negotiations team is strategically targeting one of your larger accounts first. In this case, creditors will need to see more funds built up before they’re willing to agree to a resolution.
When Will Beyond Finance Contact My Creditors?
Sometimes a client will pick up a creditor call and hear “Beyond Finance never even contacted us.” The client will then understandably ask our team, “Why haven’t you let my creditors know I’m in the program? If you did, these creditor calls would stop!”
The truth is, we delay our contact with your creditors by design. There are two reasons for this:
- Even if we did reach out to creditors early on, they would unfortunately not stop calling. They will always try their hardest to get to you first, convincing you to go back to making minimum payments, before they’re willing to accept a resolution.
- It can actually put future resolutions at risk if we contact creditors too early. “Too early” can mean before the delinquency period is complete or before we’re in a good negotiating position to reach an optimal resolution.
For the second reason especially, we strategically delay our contact with each of your creditors until it’s in your best interest for us to do so.
Final Words: We’re Here to Support You
It can require patience to wait to see for yourself that the process works, but you don’t have to do it alone! You can get support in a number of ways:
- Visit our blog for motivational content, client success stories, and education around the process.
- Join our weekly Financial Wellness Sessions where you can meet other clients in the program and receive guidance from our financial therapists.
- Reach out to our team! We’ll always be here to walk you through your progress, help you understand what to expect next, and offer some words of encouragement.
Whether it comes at the 3-month point, or a little later down the line, rest assured that our team is ready to jump into action to secure your first resolution as soon as possible!