| Debt Common Questions (FAQ) |
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Debt Settlement, Debt Negotiation, Debt Elimination, Debt Consolidation FAQWe understand that as a consumer you may have different concerns about debt settlement or debt elimination. We want to make the process completely clear for you to make the best decision. Here are some of the most frequently asked
questions about debt elimination o debt settlement. If you can’t find
the answer you’re looking for in this page, we will gladly answer any
questions you send us through the form available.
What is Debt Elimination? Debt elimination is any technique that can be used to help you lower your debts. Examples of debt elimination include debt settlement, debt consolidation, and consumer credit counseling. What is Debt Settlement? Debt settlement, also known as debt negotiation and debt reduction, is a process that involves negotiating directly with creditors to eliminate the outstanding balance of a debt. Debt debt settlement allows both the debtor and the creditor to reach a mutual agreement that meets both parties' needs. One of the most important advantages of debt settlement is that the creditor agrees to having been paid "in full" or that the debt was paid in a "satisfactory" condition.What is Debt Consolidation? Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan. Debt consolidation can simply be from a number of unsecured loans into another unsecured loan, but more often it involves a secured loan against an asset that serves as collateral, which is most commonly a house.
Consumer Credit Counseling involves consolidating monthly payments to creditors into one monthly payment made to a credit counseling/consolidation company. These companies are in charge of disbursing individual payments to each creditor. Often times, these companies can help you lower you monthly interest rates. Consumer Credit Counseling is more commonly referred to as debt consolidation. Are Debt Settlement and Debt Consolidation/Credit Counseling the same? No. Debt consolidation combines many small debts into one large debt, with the hopes of paying the lowest interest rates possible. However, the overall size of the debt does not change, only the interest rate. Debt settlement involves negotiating to lower your total debt amount-thus eliminating a large portion of your debt.A Debt Elimination Program is the process of you saving a percentage
of what your monthly debt payments are at the present. Then according
to the funds you have in your account, we will begin to negotiate with
the creditor. You save these funds in a separate account, we never
touch your money nor have control of your money. Once we have reached
an agreement, we will let you know how to pay the funds to the
creditors under the terms you have agreed to. These funds are not paid
to the creditor until the creditor sends us a settlement letter
outlining the terms agreed upon and the amount of the settlement. Our debt elimination program is amazingly simple. As a client, you
are assigned a single DebtorSolution professional consultant whose job
will be to accompany you throughout the entire debt elimination
process. The first step is for our consultant to get a thorough
understanding of your story. Based on each unique case, our consultant
will assist you in organizing your individual goals. With these goals
in mind, our consultant will begin the negotiation process with the
creditors. Only average, the debt elimination program lasts from 18-36 months. The length of the program depends on several issues: total outstanding debt amount, number of creditors, and monthly savings. Most creditors are not willing to wait for more than 3 years to receive a payment. Thus, we like to keep the average plan between 30-36 months. Depending on the situation, we have been able to extend the program up to 40-42 months, but this is not something we do often. How much do I need to save per month?Monthly saving vary according to the individual case, but on average clients save about 1.5% of their outstanding debt balance What does DebtorSolution's Debt Settlement Program cost?At DebtorSolution, we have the most competitive prices in the industry. Absolutely. Immediately upon entering our debt
settlement program, you will receive a welcome packet that will include
a cease-and-desist letter, a power of authorization letter, and an
account closure letter. We ask that you sign these forms and direct you
to where they should be mail (it can be regular mail to avoid paying
extra postage fees). Since you are mailing the letters, you can be sure
that creditors are aware of us from day one. We will continue to
contact them on your behalf until the account is settled. Our plan is
extremely effective because we do not believe in hiding from creditors.
This philosophy gives us more credibility with them because they are
not forced to call repetitively to contact us. Creditors appreciate
this upfront honestly, and this helps us to maintain an excellent
reputation with creditors, which means better saving for you.
Does Debt Settlement and Elimination affect my credit? Initially, yes. In the beginning, creditors will continue to report your account as delinquent. However, once you reach an agreement with the creditor, then your account will be labeled as "Settled in full or Paid in full". This will allow you to start from zero and begin to rebuild your credit.This option is much more favorable than filing bankruptcy, will remain on your credit history any where from 7-10 years. Once you have finished the program, you can go through a credit repair program to clear all the marks from your credit history. Who will be in charge of my Debt Elimination account? Will I have to talk to numerous people?Upon entering into our debt settlement program, you will be assigned one account manager who will be in charge of handling your account. Unless that individual is sick or on vacation, all information regarding the account will be communicated to your account manager who will in turn communicate that information to you. Likewise, any information or updates you have regarding your account should be directed to your account manager. Our system is designed to maximize communication effectiveness and eliminate any need for you to have to speak to numerous individuals. It is important to note that while your account
manager will manage your account, he or she will not be in charge of
the actual negotiations. We have a team of professional negotiator who
handle all communications with creditors. Their job is to maintain
constant contact with creditors to ensure the best settlement deals for
you.
Why chose DebtorSolution debt elimination program? There are a number of reasons you should chose us:
How do I apply to your Debt Settlement program? We recommend speaking to one of our professional
consultants first. He or she will be able to answer any questions
regarding the program and your specific situation. You can contact us
at 1-866-892-5132. Once you have spoken to one of our consultant and
decided that our debt settlement program is the best solution for you,
all you need to do is complete our application and send it back to us
along with copies of your most previous statements and a copy of a
voided check. We will review your application and inform you within 48
hours if you have been accepted into the program.
Can I negotiate my debt with creditors myself? Yes, you can. However, this is not a wise decision unless you are a highly-trained, expert debt negotiator like our consultants who know the ins and outs of the credit negotiating system. An individual who has no experience negotiating credit may make many mistakes which could cost them much more money. Our consultants will also be able to explain and recognize good deals. This is a very emotional time in one's life, and by using DebtorSolution, our clients eliminate the possibility of letting their emotions cost them a great deal that could mean the life that they have always wanted.Is everyone accepted into the debt elimination program? Not everyone is eligible. Due to strict policies and guidelines, not everyone who applies to the program is accepted. Once we receive your application, we evaluate all applicants according to their hardship, month savings, and creditors. We want to make sure that everyone who enters the program is able to take full advantage of our services. If we feel that an applicant does not meet the criteria to be successful, we will not accept him or her into our debt settlement program.I was thinking about saving up money for a few months and then joining the debt relief program. Is this a good idea?
Many clients choose to wait several months before entering into the debt relief program. While this is possible, we do not recommend it for two main reasons. Firstly and most importantly, there is a possibility that the creditor with take legal action against you during that time. If this happens, it could jeopardize our ability to negotiate the account and your opportunity to pay only 40% of the outstanding balance. Secondly, during this time, you will be charge interest, late fees, and possibly other types of fees. We calculate both your payments and our fees on the total account balance when you enter the program. If the total balance increase, that mean you will be paying higher settlements and more commission. |