Some creditors will not allow a payment reduction, although the majority will. In addition, sometimes the current payment is already substantially low and to place the account in our program (in accordance with a creditor’s policy on minimum payments) the payment may actually increase. When this happens, however, the creditor often makes other concessions. Nonetheless, a client’s total monthly debt service can usually be reduced by 15% to 30%.
A payment reduction, incidentally, may or may not be important to a client. Some clients, for example, are not interested in a payment reduction. They are more interested in a fixed monthly consolidated payment, bringing their accounts current, stopping late fees and/or interest reduction. Some clients even prefer a higher payment, thus accelerating liquidation. For most clients, however, a payment reduction is crucial. In any case, the amount and importance of a payment reduction is dependent of the client’s circumstances and objectives.