The typical debt settlement trust account does not earn interest however it is FDIC insured up to $100,000 dollars. Companies that utilize a trust account model usually have a higher success rate than those that don’t.
Debt Settlement Trust Accounts
A legitimate debt settlement company will provide a client with an FDIC insured trust account through a third party in order to settle debts. The purpose of this account is for client control and easy access to the funds needed to settle with creditors. When you are actively participating in a debt settlement program you will make one monthly payment into this account.Month over month the funds will accrue in your account. If you are paying $500/month then after 1 year you will have close to $6k in your account unless settlements have been made in which case the balance would be less. It makes life both for you and the creditor much easier when you funds are held in a trust account. Your negotiators always have the back up plan that if while working your accounts they come across a better than expected settlement offer they, with your permission can pay it , and you will be debt free on that account in question.
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