Responsible Debt Relief

Benefits to Consumers

Individuals and families facing serious debt hardships need to understand that Responsible Debt Relief (RDR) is a nonprofit organization dedicated to helping them in difficult times. The widespread application precision of the RDR debt repayment assessment is unparalleled in the industry. This innovative system offers a new debt repayment program that consumers and creditors can agree on based on an objective assessment of financial capability. In other words, the objective repayment assessment directs consumers to one of three programs based upon a state of the art algorithm. This RDR filtering process provides consumers the confidence that they will be guided to the most appropriate payment program that is offered by a company that adheres to the best practices of the industry.

Benefits to Creditors

The revolutionary RDR system offers creditors a transparent, state-of-the-art, empirical estimate of how much unsecured debt a client can realistically repay based on household income, locality specific cost of living, household expenses, state tax obligations, homeownership, and tax filer status.   Based on this initial and verifiable RDR "means test" assessment, clients are referred to full-payment (CCCS), partial payment ("Responsible Choice"), or bankruptcy (Ch 13 and Ch 7).   The objective is to match the client to the most appropriate debt resolution program.  In terms of the latter, debt settlement companies are not an approved option and bankruptcy is only recommended to those whom cannot repay at least 20 percent of their unsecured debts.

1. Full payment – Our carefully selected nonprofit credit counseling companies offering credit counseling and are devoted to the improving clients’ financial health. Specifically, they provide consumers educational programs and personal finance management tools to overcome their current financial difficulties. This is the best option for those who have the requisite income to meet their debt demands, but are ill-equipped to handle the complexities of personal finance and debt repayment.

1. Full payment – Debt Management Programs that are created and administered by nonprofit, Consumer Credit Counseling Services (CCCS) companies.  Only CCCS companies that adhere to the RDR "best practices" code of conduct are affiliated with the RDR system. 

2. Partial payment – A 3-year, 36-month debt repayment, which will extinguish unsecured debts at a particular percentage derived from the assessment. This allows the consumer to pay a fraction of their unsecured debts and resume their normal lives with debt behind them. This option is suited for those near-bankruptcy individuals who are financially distressed, and by utilizing this revolutionary bankruptcy alternative, they will resume to normalcy much quicker as opposed to bankruptcy. Essentially, this is an innovative alternative to Chapter 13 bankruptcy, which is a reorganization of debts, but fails to address certain intricacies, which ultimately, doesn’t specify the extreme variability for each individual. Rather, Chapter 13 reorganization involves using an income means-test, which in today’s technological efficient society, is obsolete in relative terms.

2. Partial payment – A three-year, 36-month debt repayment plan that is based on the RDR client assessment and features pro-rata payments to all creditors included in the "Responsible Choice" plan.  Consumers must verify income and submit a signed affidavit that affirms the accuracy of their financial situation.  All monthly payments are directly sent by clients to their creditors and all program management expenses are paid to the plan administrator by the client.  Individual client account information is posted in real time in a password protected, website environment as a service to creditors.  Also, creditors are informed when consumers fall behind in their payments and are dropped from the RDR program.  Only debt resolution companies that adhere to the RDR "best practices" code of conduct are affiliated with the RDR system. 

3. Bankruptcy – If the assessment results in a minimal repayment (typically less than 20%), consumers are directed towards Chapter 7 Bankruptcy because creditors typically do not accept partial payments below 20%. This form of bankruptcy discharges all unsecured debts, including credit cards, medical debts, and charge cards. Sometimes this is the best alternative considering the circumstances; however, this option tarnishes the consumer’s credit and hinders their ability to obtain credit in the intermediate future.

3. Bankruptcy – If the consumer cannot repay at least 20 percent of outstanding unsecured debt or cannot obtain sufficient creditor agreements, then bankruptcy is recommended as the least preferred option.  Based on the Federal Bankruptcy Court's inability to modify home mortgage loans, unsecured creditors are increasingly finding that bankruptcy does not ensure an equitable or reliable rate of recovery.  Only bankruptcy professionals that adhere to the RDR "best practices" code of conduct are affiliated with the RDR system.  These include public interest law groups, law school clinics, pro bono attorney networks, large bankruptcy firms, and bankruptcy practitioners.