What does performance-based debt relief mean?

It means our clients only pay for the service after they approve the results.

Debt Settlement often outperforms Debt Consolidation loans and Bankruptcy in the long run. The service is one of the few financial services where the company is legally prohibited from charging any fees upfront. Under federal law, a debt settlement provider cannot be compensated until each individual settlement is completed, you approve the terms, and you make the first payment toward that settlement.

This makes debt settlement fundamentally performance‑based. The company must deliver results before earning compensation, and every fee is tied directly to a successful outcome. Before a single dollar is paid, the provider invests substantial time into setting up your program, establishing your escrow account, analyzing creditor behavior, building negotiation strategies, and managing communication. All of this upfront work is performed at the company’s risk, not yours.

This risk‑aligned model is one of the key reasons debt settlement often becomes a more consumer‑friendly long‑term option compared to debt consolidation loans or Chapter 7 bankruptcy.

Our (New Era Debt Solution’s) Success Depends on each Client’s Settlement Success

Debt settlement companies carry the upfront burden of:

• Program setup
• Escrow creation
• Strategy development
• Creditor research
• Negotiation timing
• Compliance
• Settlement contracts (precise filing records is key)
• Payments to your creditors
• You pay only after a debt is successfully settled and you make your first payment toward that settlement.
• This structure aligns incentives: the company succeeds only when you do.

How much are New Era Debt Solution’s Performance‑Based Fees

First off, you’ll be happy to know that there are NO HIDDEN FEES with New Era Debt Solutions. Your exact fee is explained multiple times before enrollment commences. For all of this service work and more over what can be multiple years, New Era does not get paid until they get a settlement approved and processed.

• Fees for services and settlements vary by state and usually fall between 15%–23% of enrolled unsecured debt.
• Some states have a fee cap. Some individuals have circumstances that require more or less service work.

Debt Settlement vs. Debt Consolidation Loans

Debt consolidation loans require full repayment of principal, interest charges, credit approval, and a new monthly payment. If the loan becomes unaffordable, the consumer absorbs all the risk.

Debt settlement reduces the total amount owed, involves no new loan, and does not require strong credit. You repay less than the full balance, and the company only earns after successful settlements.

Debt Settlement vs. Chapter 7 Bankruptcy

Bankruptcy can be the right choice in extreme situations, but it carries long‑term consequences: a public record for up to 10 years, potential asset liquidation, lifelong disclosure requirements, and delayed credit recovery.

Debt settlement is private, protects assets, and typically runs 24–48 months, with credit recovery beginning shortly after completion. Settled accounts fall off your credit report after seven years under FCRA guidelines.

Which Option Helps You Move Forward Faster?

• Debt consolidation loans: full repayment + interest
• Debt settlement: reduced balances, no public record, faster recovery, performance‑based fees
  • For many households, debt settlement offers the most balanced path: lower repayment, shorter credit impact, and a company that only succeeds when you do.
• Bankruptcy: *decade‑long public record | *for some applications you may have to disclose that you filed regardless of the filing date.
  • A Chapter 7 or Chapter 13 bankruptcy becomes part of your public record, and the credit report impact lasts:
  • Chapter 7: up to 10 years
  • Chapter 13: up to 7 years

But the public record itself is permanent — court filings don’t disappear. They remain accessible indefinitely through PACER or other public court databases.

Many applications ask whether you have ever filed for bankruptcy, including:

• Mortgage applications
• Certain rental applications
• Some employment roles (especially financial or fiduciary positions)
• Security clearance forms
• Professional licensing applications

If the question says “Have you EVER filed for bankruptcy?”, you must disclose it — even if it was 20+ years ago.

FAQ: Debt Settlement vs. Debt Consolidation Loans vs. Bankruptcy

What does performance‑based mean in debt settlement?

Debt settlement is performance‑based because companies are legally prohibited from charging upfront fees. You only pay after a debt is successfully negotiated, you approve the settlement, and you make your first payment toward it. This ensures the company earns only when it delivers results, aligning incentives with the consumer.

Why do debt settlement companies carry the upfront risk?

Debt settlement companies carry upfront risk because federal law requires them to complete work before earning fees. They must set up your program, create your escrow account, analyze creditors, build negotiation strategies, and manage communication long before compensation. All initial labor is performed at the company’s risk, not the consumer’s.

How is debt settlement different from a debt consolidation loan?

Debt consolidation loans require full repayment of principal plus interest and depend on credit approval. Debt settlement reduces the total amount owed, involves no new loan, and doesn’t require strong credit. You repay less than the full balance, and the company only earns after successful settlements, shifting risk away from the consumer.

Is debt settlement easier to qualify for than a consolidation loan?

Yes. Debt consolidation loans typically require good credit, stable income, and favorable debt‑to‑income ratios. Debt settlement has no credit score requirement and doesn’t involve loan approval. It’s accessible to consumers who cannot qualify for affordable consolidation loan terms or who need a reduction in total debt, not just restructuring.

Does debt settlement affect my credit less than bankruptcy?

Debt settlement usually affects credit less than bankruptcy. Settlement causes a temporary score drop, but recovery often begins within months of program completion. Chapter 7 bankruptcy creates a 10‑year public record, slows credit rebuilding, and requires lifelong disclosure on many applications. Settlement is private and has a shorter credit impact.

How long does debt settlement take compared to bankruptcy?

Debt settlement typically takes 24–48 months to complete, with credit recovery beginning shortly afterward. Chapter 7 bankruptcy may resolve quickly, but its public record remains for up to 10 years, delaying financial recovery. Settlement offers a shorter overall impact period and avoids the decade‑long visibility associated with bankruptcy filings.

Does debt settlement allow me to repay part of what I owe?

Yes. Debt settlement negotiates a reduced amount that both you and the creditor agree to, allowing you to repay part of the debt rather than walking away entirely. Bankruptcy may discharge debts completely, leaving creditors unpaid. Settlement appeals to consumers who prefer partial repayment and want to avoid a public record.

Does bankruptcy require lifelong disclosure?

Often, yes. Even after bankruptcy falls off your credit report, many applications—such as certain loans, professional licenses, and security clearances—ask whether you have ever filed for bankruptcy. You must answer truthfully. Debt settlement has no lifelong disclosure requirement and does not create a public record.

How does debt settlement appear on my credit report?

Debt settlement typically appears as “settled” or “settled for less than the full balance.” These entries are removed after seven years from the original delinquency date under FCRA rules. Bankruptcy appears as a public record for up to 10 years and signals court‑ordered discharge, which carries longer‑term credit stigma.

Does my credit score improve as I settle each account?

Often, yes. While settlement doesn’t trigger an immediate score increase, resolving delinquent accounts stops negative reporting, reduces total debt, and improves credit utilization. Many consumers see gradual score improvement as each account is settled, especially if those accounts were previously delinquent or in collections.

Can I still file bankruptcy later if I choose debt settlement now?

Yes. Participating in or completing a debt settlement program does not prevent you from filing bankruptcy later if you qualify. Bankruptcy laws limit how often you can file, but settlement does not restrict future eligibility. Consumers can pursue bankruptcy if circumstances change or additional financial hardship occurs.

Legal Disclaimer: New Era Debt Solutions and its IAPDA‑certified Certified Debt Specialists are not attorneys and do not provide legal advice. We are not a law firm, and we are not licensed to practice law or offer bankruptcy guidance. If you are evaluating debt settlement as an alternative to bankruptcy, you should consult with a licensed attorney to understand your legal rights and options.