Debt reduction firm helps save businesses from financial collapse
By Stephanie Bertholdo bertholdo@theacorn.com

WENDY PIERRO/Acorn Newspapers FINANCIAL RELIEF- Christine Janklow, president of FranklinMediation, takes a moment from her busy schedule in her Camarillo office. Janklow's company specializes in business debt resolution.

Businesses that have racked up $15,000 or more in debt can avoid bankruptcy and hold off financial freefall with a commercial debt resolution program offered by FranklinMediation in Camarillo.

Christine Janklow, president of FranklinMediation, said the national company headquartered in Camarillo handles $12 million of new business debt per month.

"There are 35 million businesses out there, and only a small percentage of those actually find the help they need," Janklow said of the failure rate of businesses, especially smaller companies that can't ride out cash flow problems. Often the weight of the debt is what causes a company to collapse, she said.

Janklow said when the economy slows businesses often face a ripple effect of indebtedness. Declining sales, lack of capital, slow-paying customers and other setbacks start the cycle. Business owners might pay their bills late and have service fees tacked on month after month. Sometimes owners must choose one or two bills to pay, defaulting with other creditors or vendors. Before long, fees and interest on unpaid loans, goods and services bring creditors out, and often business owners believe they have no alternative but bankruptcy.

"They want to make good but they can't," Janklow said of such businesses.

Sometimes businesses will pay the minimum amount on their credit, but the compounded interest and fees are enough to topple a business, Janklow said.

To get a business back on sound financial ground, Franklin requires at least a little cash flow. "If you have no money you really have to file for bankruptcy," Janklow said.

Once a business has qualified, Franklin contacts all creditors and the negotiations begin. Janklow said her firm has established a relationship with many banks and other financial institutions, which enables the company "to get deals for our clients," she said.

The deals are substantial. To settle their debt for 40 percent to 50 percent less than what is owed, each client signs limited power of attorney authorizing FranklinMediation to manage and negotiate their debt. Clients are also required to fund a thirdparty trust account in lieu of sending money to creditors in order to save on high interest rates and late fees. As funds accumulate, Franklin pays off vendors, banks and other creditors one at a time.

Janklow said her company works directly with banks, vendors, credit card companies, landlords, suppliers and collection agencies on behalf of its clients. The company also has a legal staff that deals with contract disputes, lawsuits, judgments and liens.

"In short, FranklinMediation frees its clients from the burden of debt so they can focus on rebuilding the business and restoring financial stability," Janklow said.

As an example of how the program works, Janklow said a client stops all payments and instead places $1,500 per month into FranklinMediation's third-party trust account. Franklin negotiates a settlement with each creditor and pays off the debt through the trust account. Rather than taking decades to pay off debt, most businesses are relieved of debt in just two to three years, she said.

"Paying off vendors one at a time provides an incentive to creditors if they know they have to be in the queue," Janklow said. "They'd rather take less (money) than nothing (at all)."

So what's in it for FranklinMediation? There are three fees required, and all are "success-based," Janklow said. The debt retainer fee is calculated at 2 percent of the total debt owed. After 60 days, the company must pay $25 per month to manage the account.

Once all debt is settled, FranklinMediation receives onethird of what was saved on the original balance.

For example, the original debt was $30,000 and interest and fees bring the total to $40,000- if FranklinMediation settles the account for $20,000, the company is entitled to one-third of the original balance- $10,000. The professional service fees paid to Franklin may be deducted as a business expense, according to the company's website.

Janklow said Franklin's success rate in settling debt is 90 percent. "We hardly ever have situations when creditors won't do workouts," she said.

Business owners with at least $15,000 worth of debt can contact FranklinMediation for a nocostorobligation consultation at (800) 630-9960 or by visiting www.franklinmediation.com.