Debt
Settlement FAQ
How do the creditors actually get paid?
When a client decides that this is the best program for them, we
set up a special "debt settlement account" at a federally
insured bank, which is in the client's name. The sole purpose of
this account is to house the money the client pays toward settling
debt on a monthly basis. Once enough money is accumulated, we will
use it to negotiate with the creditors one at a time. All payments
to the creditors will be made from this account.
How do I pay for these settlements, how does it work?
We work out a monthly amount that each client can afford to pay.
That amount is electronically debited from their personal bank account
and deposited into their "settlement account" at a federally
insured bank on the date (s) they work out with our Debt Consultants.
When the client has accumulated enough money to cover the settlement
and our fee, we contact one of the creditors and make them an offer.
Offers are submitted until both the client and the creditor agree
on the amount. We then get the client's written or electronic approval
on the total settlement (including fees). Upon receipt of the client
approval, the bank will release the funds necessary to cover the
total settlement (including fees). Once this settlement is paid,
the client will begin the accumulation of funds in their settlement
account and the process will repeat as money becomes available for
the next settlement. We continue in this way until all of the accounts
are settled.
It is important to note that we do not make any monthly payments
to the creditors and we cannot pay for a settlement without our
client's written or electronic approval.
What happens to my creditors while I am on the program?
Instead of your money going to your creditors each month, we will
transfer the money from your personal account over to your settlement
account per the schedule you create with us. You will continue to
accumulate money in the settlement account until you have the money
for us to negotiate a settlement.
The whole idea is that instead of paying the minimum payment or
less each month and falling further and further behind, you will
take the money you can afford and use it for lump sum settlements
with you creditors.
Will the creditors start calling and harassing me?
Yes. As someone goes delinquent with their accounts, especially
in the beginning, they will get creditor calls. However, we have
developed steps that our clients can use that are effective in reducing
and often eliminating phone calls from creditors
What happens to my credit?
If you are already behind on payments, or you might be shortly,
your credit is already impaired - you have too much debt compared
to your income. This is known as a high debt-to-income ratio. To
be considered credit-worthy again, you must drastically reduce or
eliminate your debt, thereby reducing your debt-to-income ratio.
Our primary thrust is to help our clients get out of debt as quickly
as possible and to get firmly back on their financial feet. Credit,
while a very important thing to have and maintain, is of secondary
importance to getting your debt under control and becoming financially
solvent. Most people think if they have stayed current on their
payments then they have good credit. In cases where the debt is
more than a person can afford, then their credit has been used up
and they are no longer really credit worthy in the eyes of most
lenders. At the end of our program, your debt-to-income ratio will
be greatly improved and you will once again be able to build really
good credit.
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Debt
settlement