Frequendly Asked Questions

What is Debt Settlement?
Debt settlement is the process of negotiating with your creditors so that you are able to pay off a certain percentage of the debt amount that you owe.

How do I qualify for your Debt Settlement Program?
It's very simple! Once you apply online using the application provided, you will be contacted by one of our debt counselors. Then, you will receive a personal detailed financial analysis. This free consultation will determine whether or not this program is right for you. We want to make sure that this is the best financial choice you can make. We don't want to make your situation any worse than it already is. But rest assured if you're in debt, and you're currently going through a hardship, then we will help you. That's what we're here to do.

Is this the same as consumer credit counseling?
No. With credit counseling, you have to pay your debts in full, but with reduced interest rates. With debt settlement, the debt itself becomes reduced, which makes paying back your creditors a lot quicker. But with credit counseling, not only are you paying back what you currently owe, but you're paying interest with that as well. And if your current debt is already high, then that doesn't help improve your debt. This may take up to 5 years. Also, credit counseling companies often receive their revenue from the very people you owe money to. So it is not in their very best interest to see you out of debt. With credit counseling, you will probably stay current with your payments and not damage your FICO score, but you will receive a negative mark on your credit report ( CC or Credit Counseling mark), which may damage your creditworthiness when looked at by lenders.

Why shouldn't I just file bankruptcy?
Many people faced with financial hardship rush to bankruptcy as a method of resolving their debt concerns, although their problems might have had other solutions. We believe bankruptcy should only be used as a last resort. A bankruptcy filing is a very detrimental entry on your credit history, and can remain on your credit reports from 7 to 10 years after the bankruptcy filling has been discharged.

How about a loan?
A loan in this case may make your situation wore than it already is. Would you even qualify for a loan' Let's say you did, you would need some sort of collateral to secure your loan. In most cases, the collateral is often your home. And if you were to default on that loan, you would loose your home. It's very risky and needs to be thought out.

Who is your perfect client?
An ideal client:

• Has a debt problem he or she cannot resolve.
• Is having trouble staying current, is delinquent, or is close to being in litigation.
• Has a positive cash flow.
• May be considering bankruptcy, but would like to avoid it.
• Has a minimum of $10,000 in unsecured debt.
• Have some type of hardship (divorce, illness, job loss, etc.).

What is Unsecured Debt?
Unsecured Debt is not collateralized by property. It includes, but is not limited to credit cards, medical bills, commercial debt, personal loans, and consumer debt.

What is Secured Debt?
A secured debt is a loan which your lender requires some sort of security item. Often, this item is a home, or property that you own. If you were to default on this loan, the lender would repossess that security item to collect on the debt you owe.

Will all creditors settle?
Each client and case is unique. Since there are only a handful of creditors, we have worked with most of them. Therefore, we know which creditors will settle, and at how much. We base our estimates on these facts. But not all are willing to work with our program.

What if I cannot afford to pay the settlement?
Only you are in control of your settlement. We will only make a settlement if your funds are available. If you don't have the funds, then a settlement is not made. If a good settlement is offered by the creditor, we will recommend taking advantage of that offer. Once again, you are in control of your settlement. We are only here to help guide you in the process. If you do not make an effort to eliminate your debt, then you probably won't. We are here to offer our services in the field of eliminating debt. But if you're not willing to put any effort into it, then your debts will not be settled.

What types of debts can be included?
We are able to resolve any unsecured debt, meaning credit cards, medical bills, etc. Debts that are secured by property, such as mortgages, car loans, or purchase contracts cannot be included. We also can't service IRS obligations or government-backed student loans.

How does this affect my taxes?
Settlements are recorded on your tax filing. If you reach a settlement, Debtors include the amount canceled in gross income for tax purposes. If you are forgiven by the creditor, you will be taxed at a normal rate. If you owe a creditor $30,000 and we settle it for $10,000, you save $20,000. If your tax rate is 25%, you pay $2500 in taxes. That means you save $17,500. If you feel like you cannot pay this off, you can claim insolvency and not owe taxes. That depends on your current financial situation.

How does this affect my credit?
Although we don't report to the credit bureaus about your participation in our program, your creditors might. Keep In mind that no form of debt reduction leaves a positive mark on your credit. Some affect it less than others. For example, compared to credit counseling, debt settlement doesn't leave as bad a mark. With debt settlement, you receive an 'open delinquency' on your credit report. But once you have come to an agreement as to how much you owe them, and you pay them, your credit report will read 'settled in full'. To the contrary, with credit counseling, you will be left with a 'CC' mark. But both of these are better than filing for bankruptcy. We are here to help you avoid bankruptcy.

Do you pay my creditors or do I pay them?
No. We are not a credit counseling program. We do not handle your funds. You don't make regular payments to your creditors with our program. Once we come to a settlement with your creditors, and you approve of this settlement, you yourself will make the payment. If you can afford to settle your debts then this program is right for you.

How long does it take?
The debt settlement process usually takes between 12 to 36 months, so you can wait for creditors makes the sensible decision to agree and negotiate.

Can I continue to use my credit cards after I'm approved into the program?
Continuing to use any credit card enrolled in our debt negotiation program may constitute fraud. We recommend that if your financial situation affords you the ability to keep one card for emergency purposes you should do so. We further recommend that you contact each of the creditors you enroll and close your account with them.

I have a flexible monthly income. Can I still participate in the program?
A. Yes. Our fees and payment schedule is on a client-by-client basis. We will figure an affordable and simple plan for your unique situation.

How much does this program cost?
Our debt settlement program costs are based on an individual basis and are determined by our experienced counselor and you. Your monthly payment will be determined by what you can comfortably afford, and is based upon your level of debt, income, and living expenses.

Can my creditors sue?
There should be no reason for them to sue unless there is a lack of communication between you and the creditor, or if they believe that you can pay the debts and are just ignoring them. If a creditor does not have an attorney in the state that you reside in, they cannot sue either, and it takes time and their own money to file a lawsuit. So it is very unlikely that they will sue. Also, you might be at risk of getting your wages garnished. Once again, this takes time and the creditor's money, so it is unlikely, but possible. You don't have to worry about creditors attacking your home equity because it is protected by your states homestead act. Although we don't guarantee that there will be no legal action, we have enough experience in the field to know that we can avoid the process.

I own a home with equity. How can this be used to help with debt settlement?
If you have available equity in your home we may be able to help you use this as a means to gather money for settlement more quickly. We have affiliations with several mortgage companies that are experienced in working with debt settlement companies. Ask your debt counselor for more information on this.

Will my information be kept private?
We are committed to maintaining complete confidentiality and privacy. Feel free to read our comprehensive privacy policy found on this site.

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