Frequently asked questions
How does Debt Settlement work?Why do creditors continue to call?
Can a creditor file a lawsuit?
Where are my monthly payments going?
May I deposit more than my scheduled payment into my account?
Will I be notified of pending settlements?
Will my creditors continue to charge interest and late fees?
Will this program have a negative effect on my credit?
How does Debt Settlement work?
With our program we negotiate on your behalf to reduce the amount you pay to your creditors. It is important to note, negotiations take place only when there are sufficient funds in your special purpose account to pay the agreed upon settlement and associated fees. Generally we look for approximately 60% of any given balance to begin negotiations on that account. It is the immediate lump sum payment on a delinquent account that gives the creditors the incentive to accept less than what is owed. We require your written approval on any and all settlements.
Why do creditors continue to call?
We will assist you in standing up to your creditors. We continuously communicate with creditors and ask them to contact us directly. We have established working relationships with many creditors. From this experience—and with your help—we can redirect the vast majority of collection calls. However, from time to time creditors may still contact you.
Can a creditor file a lawsuit?
Yes, your creditors have the option of using the legal system to enforce the contractual agreement you made with them. While it is a possibility it is also a common tactic of third-party creditors or collection agencies to threaten you with a lawsuit. The reality is that third-party creditors or collection agencies rarely ever sue. You should be aware that a creditor can only sue you if it retains an attorney that is in your state.
In conclusion, it is typically more cost effective for a creditor to settle than to pursue legal action. However, in light of the recent economic hardship some creditors are becoming more aggressive and exercising this option. While we cannot guarantee that legal action will not be taken, we are confident that our experience and your help in dealing with creditors can reduce the possibility of this happening.
In the event of a lawsuit being filed and pursuant to our contract we cannot represent you in legal proceedings. Please notify us immediately if you think you received a lawsuit.
Where are my monthly payments going?
Due to the nature of the debt settlement program and the necessity to have sufficient funds prior to negotiating on your behalf, regular monthly payments are extremely important. Your first monthly payments will be used to satisfy the enrollment fee. Once the enrollment fee has been met, the monthly payments are credited into your special purpose account. The money in this account is used to pay the settlements and the associated fees.
May I deposit more than my scheduled payment into my account?
Yes! The sooner funds are available in your special purpose account the sooner we can begin negotiating with your creditors.
Will I be notified of pending settlements?
Because creditors often require payment with in 24 to 48 hours. We will inform you as soon as possible of a pending or paid settlement.
Will my creditors continue to charge interest and late fees?
Your accounts may continue to accrue interest and late fees. However, our estimate of a 60% settlement on your accounts takes these charges into consideration.
Will this program have a negative effect on my credit?
Yes, participating in our program will have a negative effect on your credit. Delinquent payments may show on your credit report for up to seven years. For more information on your credit score and how it is compiled please visit myfico.com. As each of your accounts are settled, your credit report will be updated to reflect this change. Therefore, upon completion of our program your credit score should begin to rise towards its previous level.