What happens next?

As a new Paydoff User, all of this may seem a little overwhelming at first.  Paydoff is here to guide you through the debt resolution process.  For most subscribers, it will take some time to save up funds for resolutions.  Negotiations may not begin for a few months or even a year, depending on your Contribution Schedule and the size of your debt.  Even before the negotiations begin, there are steps that must be complete to set the stage for negotiations.   First, let’s talk about what happens when you become a Paydoff User and later, we will discuss the negotiation process. 

When you first subscribe to Paydoff, there are a few items that will need your attention to get going.  These items will show up in your To Do List.

Your To Do List

Creating Your Hardship Letter(s):

All Original Creditors should be sent a Hardship Letter.  The goal of the Hardship Letter is to show good faith to your creditors - that you are willing to resolve your debt, given some time to get your finances in order. The hope is that your creditor will view this letter as an act of good faith on your part and that your account will then move slowly through the regular collection process and not be escalated for heightened collection activity. Paydoff will guide you through creating an effective Hardship letter. 

Validation of Debt Letter(s):

For accounts currently with a Collection Agency, you will be prompted to create and send a Validation of Debt Request.  It is your legal right to request validation to ensure that the Collection Agency has the right to collect on your debt.  It is also the hope that this request will slow the collection process, giving you time to save up for a resolution.  Once a collector has received a written Validation Request, all collection activity must stop until the collector validates the debt in writing.   The collection agency is not required to validate the debt, and from a strategy position, your hope is that they do not respond to your Validation Request so that all collection activity is ceased.  

Your Contribution Account:

Resolving your debt requires having funds readily available for when a deal has been made.  It is highly recommended that you keep funds dedicated towards resolving your debt completely separate from the rest of your household funds.  Paydoff refers to such account as your Contribution Account.  As each month passes, deposit your monthly Contribution Amount into your dedicated Contribution Account.  Paydoff will ask you each month to update you Contribution Account balance in order to compare the amount of funds you have available to your list of creditors to alert you to possible negotiation opportunities. 

The Negotiation Process:

As you begin to build funds in your Contribution Account, Paydoff will identify if any of your accounts are ready to begin negotiations.  You are able to review all of your accounts in one easy to understand snap shot so that you can quickly decide which creditor you would like to negotiate and when. 

You are encouraged to begin negotiations at any time you see fit.  Remember, all decisions regarding your debt and negotiations are yours alone to make.  It is totally up to you, Paydoff will just provide you the information you need to make decisions you can feel confident in.  All negotiation suggestions and alerts are based on recent resolutions with other users as well as decades of industry research and standards.

Once you are ready to make an offer to one of your creditors, you must decide how much to offer and then send them a proposal for settlement. Paydoff will take you through the process, step by step, to create a valid and effective settlement proposal. 

Once the creditor receives your offer, they will either accept, decline or send you a counter offer.  The most common response to a reasonable settlement offer is for the creditor to counter offer.  During the negotiation process, it is likely there will be some back and forth offers between you and the creditor.  You are encouraged to provide Paydoff all counter offers and communication you receive from your creditors so that Paydoff can guide you through this process.  For each counter off you enter into Paydoff, you will receive guidance on how to proceed.  It is always your decision how to handle your debt; Paydoff will just provide suggestions that have produced positive results with other users in similar situations as yours.

Once you are ready to accept a settlement, Paydoff will guide you to ensure that the settlement letter is valid and has the required information on it so that you do not disburse funds to a creditor before you have the proper documentation.  Paydoff will help you to recognize a valid settlement letter so you can protect yourself, and your money!  Paydoff will suggest the best way to send settlement funds to the creditor to make sure that the money is received on time and sent to the correct place.  As you begin to settle your accounts, Paydoff will keep track of each settlement for you.