Patriot Funding has been reviewed by Crixeo, the popular news and reviews site, for being part of a long-running debt consolidation and credit card relief scam. According to Crixeo:
“The story is the same. They lure you in by sending you direct mail with a “personalized invitation code” and a low 3%-4% interest rate to consolidate your high-interest credit card debt. You will be directed to Patriot Funding Review or My Patriot Funding More than likely you will not qualify for one of their credit card consolidation loans and they will try and flip you into a more expensive debt settlement product.”
Ed Miles, crixeo.com
Once you pick a debt relief company to assist you with settling your debts, you have to explain your financial matters in detail. This will determine how much money you will be able to and need to pay off. Next, you will work on how to work with the debt relief process.
One thing you can do is go for a lump sum payment. This way, you can save on the total debt amount and can pay off the now reduced debt completely. Another strategy that can work out is a new term relief — a new payment period and lower monthly amount is assigned to you.
After deciding an approach, take out the agreed amount from your funds, which will be offered to the creditor as part of the relief. This amount is decided based on your basic expenses, income, and debt balance.
Until this point, the creditor does not yet know about your intention to settle the debt. From their perspective, you aren’t paying monthly payments and they will soon contact you via mails and phone calls to pay off your dues. Remain silent and add money to the FDIC insured account, arranged by a debt relief expert.
While building the funds, the debt relief company contacts your creditor and starts negotiations on your behalf. They will convince them by showing evidence about why you can’t pay and have them agree to new payment terms. All of this occurs after three months of non-payment. This is the best time because the creditor is likely to have “charged off” your debt .i.e. they will get a tax break and have written you off as “bad debt”.
The creditor initiates their own probe on the matter. To do this, they go through your payment history and evaluate your payments with other creditors. Once they are certain that you have a genuine case, you receive the confirmation through your debt relief company. Keep in mind that you will receive a written relief offer. Once that happens, the funds that you have been saving quietly will be used for settling the debt. This process is repeated for each of your debts.
Appearances Matter
One of the primary considerations in the debt relief process is to make it crystal clear that you are in dire financial straits. If your creditor is convinced that you are in a tight spot, then they are likely to settle the debt due to the fear of losing more.
On the contrary, if their investigation of your card statements discloses several trips to designer-boutique shopping sprees or five five-star hotels, then your creditor will not take you seriously. To increase the likelihood of success, reduce your spending on all your cards to a minimum for at least three months. Afterward, you are likely to receive approval from requesting a debt relief.
On a similar note, if you are making a minimum payment each month, it would appear as if you are trying to escape your debt obligations. Debt relief only works against companies with which you have fallen behind on payments.
Dangers of Debt Relief
On the face of it, debt relief seems great. You pay the debt relief company who then pays it to your creditors. Eventually, everyone is paid and you can move on. However, the part where you decided to stop making payments during the negotiation can haunt you later.
Creditors only agree to a relief when the borrower is a few months past due. This means that you are required to stop paying your accounts and allow them to become past due. During this period, the interest and late charges can increase. Moreover, the credit bureaus may get a report about your late payments, which can reduce your credit score. Soon, you might even get collection calls.
Irrespective of the debt relief process, the late payments can affect your credit history for years — seven years at most. You will have a hard time taking out loans and new credit card debt, unless you can improve your credit history with positive credit activities. Sometimes, a poor credit score can even intercept your chances of getting a job or a good insurance rate.
Final Thoughts
When planned smartly, creditors often agree to debt relief, which lowers your payments to a considerable extent. However, there is always a risk of getting rejections along the way. For that, you can try alternative options. For instance, you can ask your creditor whether they can lower your card’s APR or ask for an alternative payment plan. Sometimes, the company representative may feel bad for rejecting your relief offer and will compensate by agreeing to another option. If you owe debt across a lot of credit cards, then you can also consider debt consolidation.
