Absolutely not. Your debt reduction program is a plan not a loan. It works by making a monthly deposit to a dedicated account that is used to pay off your loans or credit card balances. Although you can use the program to pay off a debt-consolidation loan if you have one.
Yes, you can. Many people like to keep one or two cards out of their debt program to use for emergency finance. But generally, you should put all cards with a balance of more than $500 in the program, because that will make it easier for your debt consultants to negotiate a settlement.
That depends on your situation. Debt relief companies can help you pay off your unsecured debts, such as credit cards, medical bills and personal loans, but not secured loans such as mortgages.
If you successfully complete the debt relief program you should have more money available to pay off mortgages and car loans. This means a person who has no secured loans can become debt free through a debt relief program.
Most debt relief companies never charge a fee until the debt has been settled. This means they will not make any money until they settle your debts. Any fee they charge will be included in the monthly savings program you will participate in.
The fee will vary from state to state. To learn how much the fee is, simply ask the debt consultant handling your case.
That really depends on your credit score. If you have a good credit score your debt consultant might be able to help you avoid being reported to the credit bureaus.
Note: some creditors might still report you to credit bureaus if you take out a debt settlement plan. Unfortunately, no-one can help you fix a bad score, but the score can improve over time if you get a record of making payments on time.
Your debt relief consultants cannot get rid of interest or late fees that you accrued before joining the debt relief plan. But your debt relief consultants may be able work out a settlement that can help you avoid future late fees.
Please note that interest will keep accruing as long as you have an unpaid balance, even if you are in a plan. The only way to stop interest from accruing is to pay off the balance.
Yes, but it is not a good idea. You will probably have no way of knowing if you are getting a good deal from creditors. Many people who negotiate themselves end up paying too much, and get stuck with lousy plans.
A debt negotiation specialist usually handles million in debt every month, so they know all the tricks of the trade. They know what they are doing so they can usually get the best settlement possible.
Most times. The amount you have to pay back is determined by the creditors, not debt relief programs. Your debt consultants will have to negotiate with each of your creditors. Some creditors will reduce debts in exchange for a payment, some may not.
Some creditors will demand repayment in full, but many of them are willing to work out new payment arrangements. Some creditors will accept a lower amount; but it is usually 50% to 75% of what is owed, not pennies on the dollar.
Not right away. You will probably receive some calls that you will have to refer to your debt relief program. After this, the calls should cease because the collectors will be talking to your debt consultants – not you.
It might take some time for creditors and collection agencies to understand we are handling your case.
It can be very effective if you have two or three years to pay off debts, or are having money problems. Most creditors would rather enter into a settlement because it is cheaper and easier than direct collections.
Many creditors actually prefer settlements, because it means they might receive some money back. They know that without it you might declare bankruptcy which would leave them with nothing.
In many cases, yes. You will not have to go to court or hire an attorney with a settlement, but you will not be able to wipe out all of your debts either. Bankruptcy is a better option for people who owe a lot of debt which they have no means of repaying.
For persons with a steady income, a settlement is often a better deal because it has less of a negative effect on their credit rating.
No. Your debt relief consultant can negotiate with creditors and ask them to drop a lawsuit, but they cannot provide legal advice or legal representation.
Usually not. Lawsuits and garnishment are actually very rare. We find that most creditors will do everything in their power to avoid courts and lawyers because of the high costs involved.
Unfortunately some of them will threaten to sue as a way to get you to pay. Your debt consultants can often get them to settle, even in the face of such threats, by offering a cheaper and easier alternative.
Simply find any one of a number of debt relief programs online and talk to one of their debt consultants. These professionals have a lot of experience to offer you. They will go over your case and recommend the best course of action for your situation.
Usually it is, but there can be restrictions. You will have to call and ask your debt consultants because laws vary widely from state to state.
A debt settlement is actually a negotiation designed to make it easier to pay off your obligations. The company you hire will first talk to your creditors and get them to suspend collection efforts in exchange for a new payment agreement.