Debt Settlement with Zwicker & Associates – Is It Right for You?

Debt can feel overwhelming. Maybe you’ve racked up credit card bills, medical expenses, or student loans. Perhaps you borrowed money from friends or took out a payday loan. Whatever the source, debt takes a toll on your finances and peace of mind.

When debts become unmanageable, debt settlement may sound appealing. Companies like Zwicker & Associates promise to negotiate with your creditors so you pay only a fraction of what you owe. It’s an attractive option, but is it right for you? This article takes an in-depth look at Zwicker’s debt settlement services.

How Debt Settlement Works

Debt settlement involves stopping payments to creditors and letting accounts fall behind. The goal is for creditors to accept a lump sum payment for less than the full amount owed. Zwicker negotiates on your behalf to secure these settlements.

For example, let’s say you owe $10,000 across three credit cards. Zwicker may get the cards to accept 40% of the balances as payment in full. That’s $4,000 total – quite a savings.

To make this work, you’ll open a dedicated account and make monthly payments to Zwicker. They hold the funds until enough accumulates to make settlement offers. This process takes around 2-4 years.

Zwicker charges fees amounting to around 20-25% of your total enrolled debt. Using our example, you’d pay $2,000 – $2,500 in fees. That still leaves a significant savings versus paying the full $10,000.

The Pros

Debt settlement offers these potential benefits:

• Pay a fraction of what you owe
• Avoid bankruptcy
• Consolidate multiple debts into one monthly payment
• Stop collection calls and lawsuits
• End interest charges and late fees

With Zwicker’s experience, you may secure better deals than trying DIY settlement. There can be peace of mind letting them handle negotiations.

The Cons

Debt settlement also has drawbacks:

• Fees can be 20-25% of total debt
• Accounts become delinquent and hurt your credit score
• Creditors may sue before settlements occur
• Settled debts may be taxable as income

Letting accounts fall behind is risky – there’s no guarantee creditors will settle. Zwicker’s fees also dig into your potential savings.

Is Zwicker & Associates Legit?

Zwicker & Associates has been around since 1991 and settled over $1 billion in debt. They’re accredited with a B+ rating from the Better Business Bureau.

However, the FTC has targeted some of Zwicker’s business practices. In 2010, they accused Zwicker of misrepresenting services and charging illegal upfront fees. Zwicker settled the charges by refunding customers and changing practices.

While Zwicker seems legitimate overall, it’s wise to research any complaints filed with the CFPB or state regulators. Also verify licensing to provide debt settlement in your state.

Zwicker’s Debt Settlement Process

If you enroll with Zwicker, here’s what to expect:

1. Consultation: Review your financial situation and debts. Zwicker explains the process and fees.
2. Setup: Open a dedicated account. Zwicker instructs you to stop paying creditors.
3. Collections: Accounts become delinquent. Creditors may assign debts to collectors or sue.
4. Negotiation: Zwicker contacts creditors and negotiates settlement offers.
5. Settlement: When sufficient funds accumulate, Zwicker secures agreements.
6. Closure: Once all debts settle, the program ends.

This process takes around 2-4 years. Zwicker’s site claims the average settlement is around 50% of the enrolled balance. However, outcomes depend on your specific creditors and debts.

Alternatives to Zwicker

Debt settlement is just one option. Depending on your circumstances, you may prefer:

• Debt Management: Repay debt through a DMP with lower interest rates.
• Credit Counseling: Receive guidance on improving finances.
• Debt Consolidation Loan: Combine debts into one with lower payments.
• Bankruptcy: Eliminate eligible debt through Chapter 7 or 13.

Each choice has pros and cons to weigh. It’s smart to consult a nonprofit credit counselor to discuss alternatives. They offer impartial guidance at little or no cost.

Is Zwicker Right for You?

Debt settlement could make sense if:

• You have unsecured debt like credit cards or medical bills
• You can’t realistically repay debts in full
• You have funds to dedicate toward settlement
• You’re willing to damage your credit temporarily
• You want to avoid bankruptcy

However, it may not be advisable if:

• You have few assets creditors can’t seize
• Lawsuits or wage garnishment have started
• You don’t have disposable income to save
• You prefer a structured debt repayment plan

Take time to understand how debt settlement works and carefully consider the risks. Get personalized advice from a nonprofit credit counselor or attorney regarding your situation. While companies like Zwicker advertise big savings, debt settlement has serious downsides to weigh. Make an informed choice about the best path forward.