Q)    Who is eligible for a debt settlement program?

A)     Any person that is in jeopardy of falling so far behind in credit card and consumer debt that bankruptcy is a possibility

Q)     Who does not qualify for debt settlement programs?

A)     Any person that can comfortably service their debt requirements

Q)     What types of loans can be included in a debt settlement?

A)     Most types of unsecured credit can be include in a debt settlement including credit cards, medical bills, department store cards, signature loans, unsecured lines of credit, and revolving debt.

Q)     What cannot be included in a settlement?

A)     Secured debt such as auto loans and mortgages cannot be included in a debt settlement.  Student loans, which are unsecured, cannot be included either.

B)      What is my role during the debt settlement process?

A)     Once your eligibility is confirmed, you will be asked fill out an application and provide your account information with your creditors. At that time a decision will be made as to how much you can afford to pay on a monthly basis. The amount you can pay each month will determine how long it will take to pay off the negotiated settlement. The most important thing you can do during the settlement process is to remain committed to it. The rewards of completing a program are substantial, the biggest reward of them being that at completion you are out of debt.

Q)     How does the debt settlement process work?

A)     Once an agreement is signed between the borrower and the debt settlement company, a monthly payment is determined, and the length of time for payoff is calculated, you will begin by making one monthly payment to a trust or escrow account where funds accumulate over time. Do not send payments directly to creditors during this accumulation period or at any time during the settlement process. Once enough funds are gathered the debt settlement company begins negotiating with creditors who, under the assumption that they might not be paid at all, are normally willing to enter negotiations and usually accept steeply discounted payoffs.   

Q)     Will my credit score go down during the settlement process?

A)     Yes. Your credit score will drop during negotiations but as debts are settled your score will begin to improve because paid or settled accounts reflect positively on your credit score, especially when weighed against un-resolved or delinquent accounts. Because of this, many exit the settlement process with scores either equal to or above the level they were at prior to starting debt settlement.

Q)     Can I be sued or have my wages garnished?

A)     Yes, but it is much less likely to happen if you are engaged in a debt settlement program. The reason is the cost of bringing a suit. If creditors know you are going to settle, they are much less likely to spend the time and money to achieve essentially the same result.

Q)     I called my credit card company and got the interest rate lowered on my card. Can I do my own debt settlement?

A)     Yes you can but you probably won’t want to. Debt settlement is an extremely time consuming and frustrating experience for a novice. You’ll be dealing with people that know the game well, and getting up to speed could take you months, if not years. The negotiations alone can take close to a year. By putting your settlement in the hands of professionals you will avoid the wasted time and get yourself a better settlement.