Debt Settlement FAQ's

A debt settlement program is only for people facing financial HARDSHIP. This means people who are late on paying their debts, have little or no ability to pay their debts in the future and are facing a possible bankruptcy

Yes, it is possible for a someone to negotiate their own debts. However, there are several factors that should be taken into consideration before making the decision to go it alone. First, do you have the time? For individuals with serious debt problems, the complexitiees of negotiation can be very time consuming. Many people do not have the time to add this labor-intensive task on top of an already busy work schedule. Second, it requires a certain kind of psychological toughness to deal with creditors. Emotions, plus all the tricks, traps, and high-pressure tactics used by creditors, most people will find themselves better off with the professional assistance of a certified professional debt arbitrator, soley dedicated to the job at hand.

Your creditors will report cancelled/settled debts exceeding $600 to the IRS and you are required to report the same as income on your annual tax return. However, the IRS may permit you to write off any "income" from canceled debts up to the amount by which you were "insolvent" at the time. You need to consult your own tax advisor for advice specific to your situation.

First, the laws vary from state to state. If you listen to some debt collectors, you may be fooled into thinking that they will take control of your very next paycheck unless you make a payment right then and there. The threat of losing part of one's wages to a garnishment action is very frightening to someone already struggling with their finances. This is mainly an intimidation tactic used by collectors to intimidate individuals into committing to a payment plan regardless of whether or not they have the funds available at that time. Actual wage garnishments are relatively rare, and do not happen without advance warning. To do this, a creditor must file a lawsuit and send you a summons, succesfully be awarded a judgment, and then take an additional steps for authorization of garnishment. Plus only one creditor can garnish your wages at a time. No one can take your paycheck without court approval, and you must be given notice of such court action through formal a documentation process. Don't be fooled by one of the oldest collector tricks in the book. Consult your debt analyst for more information on your specific situation.

NO. Companies cannot remove legitimate negative items from your credit report. Negative items will remain on your credit report according to the conditions imposed by the credit reporting agencies. The goal of a Debt Settlement program is to settle your delinquent accounts. When a delinquent account is settled this is reflected on credit report.

NO. Your creditors have every right to try and contact you in order to collect a debt. If your account is in collections; collections agencies have to adhere to the FDCPA Guidelines. If you would like to learn more please read The Fair Debt Collection Practices Act. This defines when and how a creditor may contact you.

While creditors, or anyone for that matter, have a right to file a lawsuit against someone, lawsuits are far less common than most people might imagine. First, it costs money to sue someone, and a legal judgment is simply a legal confirmation that you owe a specific debt obligation. Collectors making the threat of litigation, however, is very common, even though debt collectors are not supposed to threaten legal action or litigation unless they are specifically authorized to bring suit. In general, lawsuits can, under most circumstances, be avoided, provided you are willing to work out suitable arrangements through the negotiation process. Most creditors would reach a negotiated settlement than spend the money it takes to bring a consumer to court, since a judgement or litigation is no guarantee of being able to collect the funds, which is their untimate goal. That's why so many settlements are succesfully negotiated every month all over America. While creditors may not admit it, our methods work much better for them than forcing people into bankruptcy through aggressive, and sometimes unlawful collection techniques.

Not all debts qualifly for the program. Please consult your debt analyst to be notified on all guidelines for program qualifications, as well as what we can and cannot do.

Yes, Interest and Fees will continue to accumulate for a period of time.

You will pay a fee which is calculated based on the total amount of debt enrolled. All costs and fees are always fully disclosed and you are required to sign for approval before you commit to our program.

NO. All credit cards in the program will not be active and you will not have credit privileges. Any cards you DO NOT put into the program should not be used. This program is for you to get out of debt.

YES. Your credit score will decline due to entering this program. How much it will decline depends on your original circumstances. Most of the accounts you place into negotiation are likely to "charge off", which will reflect negatively on your credit. When a settlement is complete the creditor should notify the credit bureaus that the account has been settled.

Bankruptcy for some people is a valid option for debt relief, though not all people qualify. Our debt analyst's go through all of a consumers options, as well as go through a thorough budget analysis to help advise you of all your options

You will be asked to put aside and save a set amount of settlement funds on a monthly basis. This amount will be determined in your initial analysis based on total amount of debt and will be in line with your income and expense budget. Each person's situation is different and the negotiation process will begin at different times depending on the amount of your debt and your ability to save funds. Once the creditor agrees to a settlement amount, we will present this offer to you. If you approve of the settlement, we will instruct the creditor to fax over the 'settlement offer' in writing and notify you, so that you can release funds to the creditor.

Complete the form online. A debt analyst will review your information and call you to review your situation. After a debt analyst has reviewed your financial situation and hardship they will determine if you are qualified for our program.

This program is not designed to negotiate debts for people who have reasonable means to pay off their debts. If you have the ability to pay your debts in the normal fashion, then you should honor your debts and do so. This program is NOT for people who have high credit ratings and can meet their monthly debt obligations.