FAQ
Q. Who is the debt negotiation program for?
A. The program is designed for anyone in financial hardship who is falling behind or having problems making minimum payments to creditors on their unsecured debts. You must have a minimum of $10,000 in total unsecured debt and a minimum of $500 of unsecured debt with each individual creditor.
Q. How do you reduce my debts?
A. Debt negotiators are trained to negotiate and work with your creditors or collectors on your behalf. While results do vary, most creditors will settle with us and you will only pay a portion of your principle balance. This occurs through a series of negotiations in which we discuss your hardship situation and your ability to pay a certain amount. All negotiation agreements are approved by you before they are finalized.
Q. How does debt negotiation compare to bankruptcy?
A. With Debt Negotiation, your accounts are settled for less and paid with a zero balance. In most cases, a bankruptcy is a consumer's last resort and has a devastating effect on your credit rating. Many of our clients look to Debt negotiation as a last resort prior to filing bankruptcy or prior to receiving any credit counseling.
Q. What is discussed during my free consultation?
A. The first thing is to see if you qualify. We look over your current financial situation and review your income and expenses in order to determine the best program for you. We will provide you with a timeline of how long it'll take to be debt free and what type of settlement to expect from each creditor or collector. Please fill out our short free debt consultation form for more details.
Q. How long does the debt negotiation program take to complete?
The average time it takes for each client is 24 - 48 months, however, it really depends on your ability to save the funds that will satisfy the amount of your settled debts.
Q. How does debt negotiation affect my credit rating?
A. Debt negotiation will have a negative impact on your credit. How much your credit declines depends on your original circumstances when enrolling in the program. When the settlement is complete, we will send to you the settlement document that you will then send to the credit reporting bureaus showing that it is "settled", "paid", or "settled and paid less than the full amount". When you have completed the program and all your debt is paid in full, your credit will typically begin to improve, provided all additional items on your credit are clean.
Q. How much does your debt negotiation program cost?
A. Our fees are among the most competitive fees in the industry. The fees for each debt negotiation vary on a case by case basis and may differ from state to state. The fees are clearly explained during your free consultation.
Q. Do I have to include all of my debts in the program?
A. You will be able to select which accounts you would like us to negotiate for you. This will be discussed during your free consultation.
Q. Do all of my debts qualify for the program?
A. The program is designed for unsecured debts. These include credit cards, personal loans, department store cards, medical bills, gas cards, past due utility bills, cash call loans, furniture loans, jewelry loans, auto loans (only if it's a repo), etc. The program will not work for home loans, equity loans, education loans, government loans, income tax payments, secured loans.
Q. Can I continue using my credit cards?
A. No! The program will not work, and the creditors are less likely to settle if you are using your cards. You shouldn't be using credit cards if you are in true financial hardship and cannot pay. This also means you must stop transferring your balances.
Q. What happens when a negotiation is reached?
A. Once a negotiation with one of your creditors has been reached and savings funds are confirmed, you will be emailed, faxed or mailed over to you the exact settlement amount for your approval. It is solely your choice to decide whether or not to accept the negotiated agreement. If approved, the papers will be signed and we will continue with the settlement process. The process will continue until all of your accounts are settled.
Q. Can I negotiate my debts on my own?
A. Negotiating your own debts can be done. Keep in mind though that Creditors are well trained in dealing with thousands of people in various degrees of financial difficulty. The process can also be very stressful, emotionally draining and time consuming. By allowing a successful debt negotiation company to act on your behalf, you will not have to deal with the stress of attempting to negotiate directly with your creditors.
Q. Do I have any tax ramifications for the amount of debt settled?
A. Creditors are required to report canceled debts exceeding $600 to the IRS and you are supposed to report the same as income on your annual tax return. However, if you were insolvent at the time, the IRS permits you to write off any income from canceled debts by the amount you are insolvent. Therefore, unless you have a positive net worth, then you ordinarily will not be obligated to pay taxes on the forgiven amounts. Also, if you do not qualify as insolvent, non principal amounts such as fees accumulated on the account may be deducted from the amount reported. Refer to IRS Publication 908. See disclaimer.
Q: Is it possible I get sued in a debt settlement program?
A: Yes, a credit card company has the right to pursue a client in court to collect the debt amount. In most cases, this is a last resort for credit card companies after they have exhausted every collection method possible. Our experienced debt analysts do a great job in making sure that the possibilities of our clients facing legal action are reduced. In most cases, the settlement process begins with your creditors when a summons is received. Since credit card companies understand that seeking legal remedies will typically result in a client filing bankruptcy, they prefer to accept settlements instead of legal action.
Q. Will I continue to get calls and correspondence from my creditors/collectors?
A. Once you are accepted into our debt negotiation program, you will direct all correspondence to our debt negotiation team. Keep in mind that there is no law that prevents creditors from sending written correspondence to you. As a matter of fact, you may receive letters from creditors or collectors discussing settlements. If you receive these letters, it is important that you forward these letters to immediately, along with any other letters of concern
Q. Will interest and late charges continue to accrue on my debts while I am on the program?
A. Most creditors will continue to charge fees and interest until the account is paid. However, when our debt negotiators work out a settlement offer, we attempt to negotiate from the original principal amount owed, not from the amount after fees and interest.
Disclaimer: This site does not provide any legal or accounting advice. Nothing on this site constitutes any offer, acceptance or legally binding agreement against any party.
