What is the Difference Between a CareOne Services, Inc. Debt Management Plan and Debt Settlement Plan?

Definition

An approach to debt repayment in which we work with you to consolidate all of your unsecured debts into a single monthly payment, with the goal of receiving better repayment terms from most creditors, such as lower interest rates and waived late fees, allowing you to pay off your debt faster than you could on your own, paying the minimum monthly payments required by your creditors.

An approach to debt reduction in which we negotiate with your creditors on your behalf to accept payment of a percentage of your unsecured debt to satisfy your entire unsecured debt. You make monthly plan payments to us, which are held in an escrow account to build in value until your creditors agree to accept our settlement offers. This is an attractive alternative to bankruptcy for those who want to pay back at least a portion of their debt and cannot afford the DMP payment.

Minimum Criteria

For our DMP, you must have at least $2,500 in unsecured debt, and at least 2 creditors that need to be repaid.

For our DSP, you must have at least $7,500 in unsecured debt, and have the ability to repay at least 50% of that debt, along with our Success Fees.

Provider

Prospects needing support through a DMP will be matched with either CareOne Services, Inc., CareOne Services, Inc. of California, or another CareOne Debt Relief Services^SM provider, depending on the state in which they reside.

CareOne provides Debt Settlement Plans in some states and Persels & Associates, a national law firm that provides debt restructuring as part of their suite of legal services, works with clients to settle debts in those states which require legal services to settle debts.

Please note that in some states, DSP counseling and debt settlement representation are prohibited by law.

Length of Program

While every plan varies slightly, on average we estimate that it will take 60 months to fully repay your plan debts, assuming that all payments are made consistently and on time.

Our plan estimates that debt settlement will take approximately 3 to 5 years to complete, based on your debts, our estimates of what your creditors will accept to settle the debts, and how fast you can save the settlement funds. This time period is very dependent upon your ability to make timely payments and your creditors’ willingness to accept our settlement terms.

Creditor Acceptance

Debt management is a creditor-approved program. Upon enrollment, every creditor is sent a proposal for debt repayment, notifying them that you are currently on a DMP, and informing them as to the debt repayment terms we are recommending.

Your creditors are not required to accept our settlement offers or to participate in the plan.

Payments

The customer is responsible for making monthly payments to CareOne, who in turn distributes an agreed upon amount to each creditor on the plan.

When enrolled in our DSP, you make monthly plan payments which are held in an escrow account to build in value until a creditor agrees to settle your debt for a percentage of the debt owed.

Payment Flexibility

Consistent and timely payments are essential to ensure that you receive and keep the creditor benefits that have been negotiated, such as lowered interest rates and waived late fees.

We are able to work with you to create a flexible payment schedule. If you are unable to make a payment this may affect the estimated length of your plan. If you miss a payment after we have successfully negotiated a settlement for you, your creditor may withdraw from the settlement, which can be detrimental to the successful completion of your plan.

Final Repayment Amount

Creditors are receiving 100% of their principal back, so that when you complete the plan it will show up as "paid in full" on your credit report.

After a settlement has been negotiated, creditors agree to accept an amount less than the full amount of debt owed. Typically, this will appear on your credit report as "agreed as settled".

Fees

With our DMP, there is a one-time activation fee and a nominal monthly service fee that varies from state to state. The monthly fee will never exceed $50.

With our DSP, we only charge a Success Fee once we have successfully negotiated a settlement offer with a creditor on your behalf. You will be notified at that time and you will be prompted to approve our Success Fee.

Credit Report

Enrollment in a DMP can have a negative effect on your credit and can limit your ability to acquire new credit while you are enrolled. However, by focusing on making timely payments on your existing debt, your financial situation will improve. Additionally, once you successfully complete the plan, your credit report will show "paid in full."

Debt settlement has a negative impact on credit and, once settled, your accounts may show "paid as agreed," or "settled," as opposed to "paid in full." This can remain on your credit report for up to 7 years.

Frequency of Enrollment

Our DMP is voluntary, and can be entered into at any time. We do not charge a fee should you need to cancel your enrollment at any time. No matter when (or if) you enroll in one of our debt relief plans, our resources and educational materials are always available online for anyone interested in learning ways to take control of their debt and finances.

Our DSP is voluntary, and can be entered into at any time. We do not charge a fee should you need to cancel your enrollment at any time. No matter when (or if) you enroll in one of our debt relief options, our resources and educational materials are always available online for anyone interested in learning ways to take control of their debt and finances.