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Who is eligible for debt settlement to get out of debt?

Debt Settlement is only appropriate for consumers in extreme financial hardship. Individuals who have large amounts of credit card debt or un-secured loans should consider debt settlement under the follow circumstances;

1) Have fallen behind on their monthly payments and are unable to get caught back up.

2) Have exhausted all other options to pay the debt. ( Home Equity Loans, Borrowing from 401K, Family Loan, etc)

What types of debts can you help me with?

• Consumer debt
• Credit card debt
• Business and/or commercial debt –Business must be dissolved
• Defaults
• Charge offs
• Debt collectors and/or attorneys
• Medical bills
• Deficiency balances (auto repossessions)
• Store credit cards
• Major credit cards
• Settlement and negotiations with nearly all creditors

What effect will debt settlements have on my credit report?

Consumers that have high / good credit scores when enrolling in settlement will see a significant drop in their credit score in the initial term of the settlement. For everyone that enrolls in settlement, credit will be impaired throughout the process. You should not apply for credit while in settlement. At the end of the settlement, credit will need to be re-built by obtaining new credit or keeping any current accounts up-to-date. Credit is determined primarily by activity in the last 24 months. The five major factors in determining credit score are: payment history, amount owed, length of time accounts have been open, new credit, and types of credit in use.

Is your service the same as debt consolidation?

No, debt consolidation or Debt Management Plans ( DMP’s) are financial products offered by the banks thru non-profit approved credit counseling agencies. Interest rates may be reduced, late and over-limit fees may be eliminated. With these plans you will pay the full amount owed plus interest typically at rate between 6-15.9% depending on the creditor. All accounts will be closed.

What is the minimum amount of debt that I must have to become a client?

$7500

How long does the debt settlement process usually take?

The length of time to settle your debt will depend greatly on how much debt you have, who your creditors are and how much funding you have. Statistically it takes anywhere from 6 months to 36 24 months.

Why shouldn’t I just file bankruptcy?

If you can qualify for chapter 7, it’s an option. It’s tough to qualify for these days. Since 2005 the bankruptcy laws were changed. It most cases if you are at or over the median income for the area you live in you are not eligible. Do your research! Don’t end up paying a lawyer thousands of dollars just to find out you don’t qualify. Go to www.uscourts.gov all the info on this site. The means test (form 22a) is available. Remember this is huge negative on your credit, it will follow you 10 years or more.

Will there be tax consequences?

If the difference of the negotiated debt is more than $600, your creditor must provide a 1099c form. You must claim this money as income. The IRS does permit you to write off any "income" from canceled debts up to the amount by which you were "insolvent" at the time.

Will I still be able to use my credit cards?

No, all credit cards and other accounts that are being settled will be closed. You may not incur additional credit card debt while in settlement.

What if a creditor won't negotiate?

It’s rare to find a creditor that will not be willing to settle. Most creditors want their money even if it’s less than what you owe. The worst-case scenario is you pay the full amount owed. Creditors settle with consumers that are in financial hardship.

Benefits of debt settlement:

• Pay less
• Avoid rude and harassing creditor calls
• One monthly installment for all your debts
• Get more time to pay