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Put the fee basis beside the percentage

What is the percentage fee calculated on?

A fee based on your starting debt can be very different from a fee based on the amount reduced. Ask for the fee in dollars and the exact calculation before comparing offers.

What is the percentage fee calculated on?
What you are comparingIn this illustration
Fee based on starting debtThe percentage uses the amount enrolled.
Fee based on a reductionThe percentage uses a defined amount reduced.
Question to askWhat is the full fee in dollars, and when is it earned?

Put the fee basis beside the percentage

A percentage has no useful meaning until you know what it multiplies. A charge based on the starting enrolled balance can differ from a charge based on the reduction negotiated, even when the percentages look similar.

Ask the company to write the complete calculation in dollars. Then ask when the charge is earned and which account it belongs to. A permitted fee calculation is a separate question from whether the overall service saves you money.

This is a saved illustration with stated assumptions, not an offer or prediction for your circumstances. The full calculation and original limitations are in the optional archive.

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Open the complete calculation, tables and source notesOriginal working documents, complete tables and revision history
About this archive

The explanation above is written for readers. These original working documents preserve the evidence trail, including technical language, dated passages and known corrections. They have not all received independent professional review. Use the marked limits before relying on a particular rule or figure.

Home Data & examples / A percentage-of-enrolled-debt fee is not a percentage-of-savings fee
DATA & WORKED EXAMPLE

A percentage-of-enrolled-debt fee is not a percentage-of-savings fee

The saved three-account example allocates an assumed $4,000 fee over a $20,000 portfolio: a $10,000 account receives $2,000 proportionally. A separate saved savings example uses $12,000 at enrollment minus $7,000 paid, not a later $14,000 balance.

Saved research, explicit assumptions and source limits. Full investigation → · All original tables →

Enrolled-balance allocation: hypothetical terms, after applicable fee-trigger conditions

StepAmount or calculationBoundary
Total enrolled debt$20,000Debts A $10,000; B $5,000; C $5,000
Assumed total contract fee$20,000 × 20% = $4,00020% is an illustrative contract assumption, not a state-law permission
Allocated fee for Debt A$4,000 × ($10,000 ÷ $20,000) = $2,000All applicable earning and allocation conditions must be satisfied

Savings-based fee: keep the enrollment baseline

StepAmount or calculationBoundary
Debt at enrollment$12,000The later $14,000 balance is not the savings base
Amount paid to satisfy this debt$7,000One-debt illustration
Defined savings base$12,000 − $7,000 = $5,000Keep the applicable rule and qualifying conditions
Assumed savings-based fee$5,000 × 25% = $1,25025% is hypothetical; not universal charging authority
One-debt reduction before other costs$12,000 − $7,000 − $1,250 = $3,750Not household savings; unresolved debts, ancillary costs and tax require separate treatment

What to keep attached

  • 20% and25% are stipulated inputs, not lawful national caps, market averages or promises. Apply covered-TSR triggers and state-law limits.
  • The three-row service-fee comparison uses invented comparison inputs, not provider pricing.
  • Original full section is archival only: it contains the superseded two-account framework and a tool opportunity that needs correction-01. Do not use that old framework as public copy.

Source trail

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