You don’t have to have $10,000 in debt to enroll. We do accept some clients with debts below that figure. However, you must have enough debt for debt resolution to actually be a benefit. Let’s look at it this way:
If you enroll $10,000 into a debt resolution program, after your fees and after the accounts age… by the time that you complete the program you’ll probably only experience a small savings. However, if you have $20,000 enrolled in a debt resolution program, your savings are going to be anywhere from $6,000 to $8,000. Same thing if you are enrolling $30,000… You’ll likely end up saving 9, 10, or 11 thousand dollars.
So, there’s a greater benefit when you have a larger amount of debt enrolled. Also, it comes down to the Time Value of Money. If you had $10,000 in debt today, and I told you that you can pay that debt off for only $7,000 or $7,500, you’d probably reason that $2,500-$3000 savings is not worth the hassle.
However, if that $7,500 didn’t have to be paid back immediately but could be paid over 30 months, now the time value of money changes things. That’s because there’s no interest and no penalties being paid on the debt, and you can make that payment over a 30-month period. NOW the program becomes much more palatable. So, it is not only the fact that you’re saving on that $10,000 balance, which will be reduced – but it’s the amount of time that you can take to pay it out.
The reason why we have that cutoff at $10,000 is for the benefit of the client.