Combined debt consolidation and settlement program

• US 20070265958A1
• Filed: 05/12/2006
• Published: 11/15/2007
• Est. Priority Date: 05/12/2006
• Status: Active Grant

• Current Assignee: CC Serve Corp. (Atlanticus Holdings Corporation)
• Original Assignee: Compucredit Intellectual Property Holdings Corporation II
• Inventors: Petralia, Kathryn
• Granted Patent: US 7,676,410 B2
• Time in Patent Office: Days
• US Class Current: 705/38
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A customer is assisted in recovering from indebtedness by combining a debt consolidation/settlement program with an installment loan. The customer is qualified for an installment loan with a value based on the amount of outstanding indebtedness or possibly based on the anticipated discounted balance. The customer is required to make payments into an escrow account for a period of time to ensure that the customer is credit worthy. One or more of the creditors are then approached in an effort to negotiate a discounted settlement amount in exchange for the reception of immediate reconciliation of the debt owed. A portion of the negotiated discount is retained for compensation, which can be provided to the debt settlement provider and/or the bank finding the installment loan. The balance is passed through to the customer.

Claims

1. A method for providing a debt consolidation financial service offered by a program provider, the service comprising the steps of:

enrolling a customer into a debt settlement program, the customer having an outstanding debt owed to one or more creditors;

qualifying the customer for a debt consolidation loan;

negotiating a discounted amount due for at least a portion of the outstanding debt owed to at least one creditor;

applying at least a portion of the funds from the debt consolidation loan as settlement for discounted amount due; and

allocating a portion of the difference between the at least a portion of the outstanding debt and the discounted amount due to the program provider.

2. The method of claim 1, wherein the step of qualifying the customer for a debt consolidation loan further comprises the steps of:

establishing a monthly payment for the customer to be made in lieu of payments to the one or more creditors for the outstanding debt; and

requiring monthly payments from the customer for an initial period of time.

3. The method of claim 1, wherein prior to the step of negotiating a discounted amount due, the method comprises the step of:

contacting the creditor prior to the creditor issuing a bad credit report against the customer.

4. The method of claim 1, further comprising the steps of:

limiting the impact on the customer'"'"'s credit rating by initiating the negotiation of the discounted amount due with the creditor just prior to the creditor writing off the debt.

5. The method of claim 4, further comprising the steps of:

establishing a credit limit for the customer;

providing the customer with a credit card instrument that can be drawn against the credit limit; and

establishing monthly credit card payments in accordance with the balance drawn against the credit limit.

6. The method of claim 1, wherein the step of enrolling a customer into a debt settlement program further comprises the step of identifying a third party debt settlement provider.

7. The method of claim 1, wherein the step of negotiating a discounted amount due for at least a portion of the outstanding debt owed to at least one creditor comprises obtaining a reduced interest rate for the debt.

8. The method of claim 1, wherein the step of negotiating a discounted amount due for at least a portion of the outstanding debt owed to at least one creditor comprises obtaining a waiver of late fees.

9. The method of claim 1, wherein the step of negotiating a discounted amount due for at least a portion of the outstanding debt owed to at least one creditor comprises obtaining a reduction in the debt.

10. The method of claim 1, wherein the step of negotiating a discounted amount due for at least a portion of the outstanding debt owed to at least one creditor comprises obtaining one or more of the following:

a decrease in the interest rate for the debt, a waiver of late fees and obtaining a reduction in the debt.

11. A method for assisting a customer in recovering from indebtedness, the method comprising the steps of:

identifying a customer, the customer having an outstanding debt owed to one or more creditors;

enrolling the customer into a debt settlement program;

establishing a monthly payment for the customer to be made in lieu of payments to creditors for the outstanding debts;

requiring monthly payments from the customer for an initial period of time to detect customer reliability;

qualifying the customer for a debt consolidation loan at an initial dollar amount after detecting a level of customer reliability as a result of the step of requiring payments from the customer;

offering at least a portion of the debt consolidation loan as a discounted settlement of an outstanding debt owed to at least one of the creditors;

providing at least a portion of the discount to the customer;

retaining a portion of the discount;

increasing the allocated amount of the debt consolidation loan by the remainder of the discount settlement;

providing the customer with a separate credit card instrument.

12. The method of claim 11, wherein the step of offering at least a portion of the debt consolidation loan as a discounted settlement of an outstanding debt owed to at least one of the creditors comprises obtaining a discount that includes one or more the following:

a decrease in the interest rate for the debt, a waiver of late fees and obtaining a reduction in the debt.

13. A method for assisting a customer in recovering from indebtedness, the method comprising the steps of:

identifying a customer, the customer having an outstanding debt owed to one or more creditors;

enrolling the customer into a debt settlement program managed by a third party;

qualifying the customer for a debt consolidation loan at an initial dollar amount;

offering at least a portion of the debt consolidation loan as a discounted settlement of an outstanding debt owed to at least one creditor;

retaining at least a portion of the value of the discount as compensation;

providing the customer with a separate credit card instrument.

14. The method of claim 13, wherein the step of qualifying the customer for a debt consolidation loan further comprises the steps of:

establishing a monthly payment for the customer to be made in lieu of payments to creditors for the outstanding debts; and

requiring monthly payments from the customer for an initial period of time to detect customer reliability.

15. The method of claim 14, wherein the step of offering at least a portion of the debt consolidation loan as settlement of is performed after the expiration of the initial period of time.

16. The method of claim 14, wherein the step of offering at least a portion of the debt consolidation loan as settlement of is performed after the expiration of the initial period of time and is managed by the third party.

17. The method of claim 14, wherein the step of qualifying the customer for a debt consolidation loan comprises approving the customer for a dollar amount that is based on the amount of the outstanding debt.

18. The method of claim 14, wherein the step of qualifying the customer for a debt consolidation loan comprises approving the customer for a dollar amount that is based on the amount of the outstanding debt and an expected discount amount.

19. The method of claim 13, wherein the step of retaining at least a portion of the value of the discount as compensation comprises the step of increasing the expended amount of the debt consolidation loan by the amount of the retained portion of the value.

20. The method of claim 13, wherein the step of offering at least a portion of the debt consolidation loan as a discounted settlement comprises obtaining a discount that includes one or more the following:

a decrease in the interest rate for the debt, a waiver of late fees and obtaining a reduction in the debt.