Combatting The Consumer Debt Crisis: How SoloSuit's SoloSettle Streamlines Debt Resolution

Various economic factors, such as rising living costs and stagnant wage growth, exacerbate the consumer debt crisis. In the second quarter of 2024, household debt reached an astonishing $17.8 trillion. This figure includes mortgage balances of $12.52 trillion, auto loans of $1.63 trillion, and credit card balances, which soared to $1.14 trillion. Motivated by these issues, SoloSuit is working to modernize the debt settlement process with its new tool, SoloSettle, which uses artificial intelligence (AI) and technology to bridge the gap between consumers and debt collectors.

Traditional debt resolution processes are historically ineffective. When a consumer is sued over an unpaid debt, resolving it involves multiple phone calls with law firms or debt collectors, as the current industry-wide practice tends to favor phone calls over communicating through digital channels, like email. Consumers might be required to wait on hold for extended periods and get asked for personal information over the phone—a risky practice that exposes them to potential identity theft. Even when an agreement is reached, payments are often made over the phone, which adds a layer of risk. 

Most consumers would rather communicate via more modern channels to negotiate a debt settlement, and several digital-forward collectors have reported to SoloSuit that non-phone digital channels tend to perform better than calls in terms of collection rates. Plus, the game of phone-tag negotiations takes significant time, and most debts take around six months to settle. 

The conventional system is time-consuming, inefficient, and filled with potential dangers, hence the need for modernization. SoloSettle, an innovative negotiation platform powered by SoloSuit, recognizes the necessity to overhaul the debt resolution process. It leverages advanced AI technology to create a more structured, secure, and user-friendly negotiation platform between debt collectors and consumers. 

This streamlined approach helps consumers to settle their debts for a fraction of the original amount. It also reduces settlement time from six months to an average of 14 days. The platform uses AI to facilitate clear and structured communication between consumers and collectors. Once an agreement is reached, the collector uploads the settlement terms to SoloSettle, where the consumer can easily sign and finalize the deal. The platform even handles the transfer of funds. Doing so ensures all payments are secure and transparent. SoloSuit absorbs all associated fees, meaning there's no cost to the collector.

George Simons, CEO of SoloSuit

The SoloSettle solution addresses a critical problem. Currently, only about 34% of delinquent debt accounts are collected. This leaves 66% uncollected. The result is financial losses for collectors and damage to consumers' credit scores, which can have long-term consequences. Unpaid debts also contribute to rising costs for everyone as businesses attempt to recoup their losses by raising prices. SoloSuit aims to solve this inefficiency by making the settlement process easier and more accessible, encouraging more consumers to settle their debts.

To better understand how SoloSettle works, consider the typical process for resolving credit card debt. The bank may flag the debt and offer the consumer more favorable terms to encourage repayment. It may eventually charge off the debt and sell it to a debt buyer for a fraction of its face value if the consumer still doesn't pay. The debt buyer attempts to collect the debt through a phone call, which, if unsuccessful, turns into a lawsuit. 

"This is where SoloSettle comes into play," says Founder and CEO George Simons. "Our platform makes it easy for the consumer to respond to the lawsuit and begin engaging with the collector. This prevents a default judgment that could result in wage garnishment or other severe penalties. We then connect the consumer with the collector for the purposes of settling the debt, and SoloSuit plays the role of a trusted mediator between the two parties.  This process is a win-win. It saves both sides time and money." 

This AI-powered system is beneficial following the growing consumer debt crisis. Traditional debt resolution methods are outdated and contribute to the stress and challenges consumers face. SoloSuit is transforming the debt settlement process by providing a modernized process that simplifies and secures negotiations between stakeholders. Ultimately, SoloSettle stands out for helping consumers regain control of their finances and mitigate the broader impacts of the debt crisis.

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