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How does the program work?
Is
debt settlement the same as debt consolidation?
Is debt settlement the same as consumer credit counseling?
Can
you settle your debt on your own?
How
long does the debt settlement program take?
What can I expect as a result of your debt settlement program?
Are
your debt settlement services guaranteed?
How will
debt settlement affect my credit?
How
does debt settlement compare to bankruptcy?
Does Debt Elimination Advisors keep my information confidential?
What is the difference between unsecured debt and secured debt?
Will I continue to get calls and collection letters from my
creditors?
Will fees and interest continue to accrue?
Will your program stop legal action against me?
How can Debt Elimination Advisors legal plan help me with legal action?
What if I'm sued and they get a Judgment?
Will I owe money to the IRS for my reduced settlement?
Who controls my personal savings used for settlement?
So what does the program cost and how do you get paid?
Who
is an Debt Elimination Advisors candidate for Debt Settlement?
How
does Debt affect my Credit Rating?
Who Pays my Creditors?
Q: How does the program
work?
A. If you regularly pay monthly minimums with high interest rates,
it could take 30 – 40 years to pay off your debts. Or maybe, you
had a decrease in income, disability, or lost a job; you are
likely already behind on payments or cannot afford to stay current
due to a financial hardship. Our certified debt negotiators will
negotiate with your creditors on your behalf, not on your
creditor’s behalf as is the case with credit counseling. Debt
Elimination Advisors gives
you an alternative to bankruptcy and a solution to your
unmanageably increasing debt due to high interest rate. So how
does settlement work?
· Debt Elimination Advisors has an affordable monthly service plan put together for you
in order to obtain settlements with your creditors.
· The settlement process in our program typically takes about 36
months or less. Debt Elimination Advisors™ has assembled an impressive team of dedicated
individuals who work with one common goal… to save you money.
· As a new client, Debt Elimination Advisors™ will educate the YOU on how to handle
creditor calls and communications. Debt Elimination Advisors will contact creditors when
it is the most appropriate time to get the best settlement for
you.
· Our expert certified debt negotiators are paid bonuses based
upon lower settlement percentages. That means the better
settlement they arrange for you, the more compensation they
receive. This ensures the settlement team is working directly for
YOU and not the creditors. As a result, the absolute best
settlement Debt Elimination Advisorsls are achieved with your best interest in mind.
· We have created a win-win relationship, by implementing
procedures to ensure the best results for our clients. As always,
getting you out of debt is our job… keeping you out is our
mission.
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Q:
Is debt settlement the same as debt consolidation?
A. No. The goal of debt settlement is to reduce the overall amount
of the debt, by negotiating agreed payoff amounts with your
creditors. Debt consolidation requires you to take a loan to pay
off your unsecured debt with secured debt.
· Debt Consolidation loans transfer the debt from one account to
another and typically takes an unsecured debt(s) and changes it
into a secured debt (usually your home). If you do not have
enough equity (typically 25 – 30% LTV), bad credit, or too much
debt, it is not likely that you will be approved for a debt
consolidation loan.
· Statistics are that about 70% of people who obtain a debt
consolidation loan find themselves in deeper debt than they were
originally in within a two year period. You cannot borrow your
way out of debt. Ask yourself why you would want to go from an
unsecured loan to a secured loan over a longer period of time?
· The main problem with consolidation loans is that once you have
paid off the credit cards you have a whole new source of spending
power: $0 Balance credit cards. It does not take long before
these cards are credit balanced out again leaving you in a worse
financial situation. You end up not only having to pay back the
cards but also the consolidation loan.
· If you start missing payments on the consolidation loan, you
stand to lose the asset (usually your home) that the loan is
secured against.
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Q: Can you settle your debt on your own?
· Sure you can, but we would not recommend it. You may be able to
make your own plumbing repairs or install your own computer
network, but most people don't have the time or expertise to Debt
Elimination Advisorsl
with it.
· Creditors Debt Elimination Advisorsl with thousands of people who are in financial
difficulty every day and have a vast array of sophisticated (and
some rather blunt) methods of intimidating you into financial
arrangements you cannot keep.
· The settlement process is usually very emotional and stressful,
especially when you are the one being attacked by collectors over
the phone. Most people prefer to leave these tasks to experienced
people who earn their livelihood doing that particular kind of
work.
· We have a staff of debt negotiators whose only job is to
negotiate the settlement of unsecured debt, every day, five days a
week. By letting Debt Elimination Advisors™ do what we do best, you will get better
settlements with a fraction of the stress.
· Debt Elimination Advisors™ knows how to Debt Elimination
Advisorsl with creditors and have in-depth
knowledge about how these institutions work. We can potentially
save you thousands of dollars and free you from a considerable
amount of stress.
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Q: Is Debt Settlement the same as Consumer Credit Counseling?
No. Debt settlement does not work like consumer credit in most
respects. The goal of the debt settlement is to reduce the
overall amount of the debt, by negotiating agreed payoff amounts
with your creditors. Debt Settlement can save you thousands of
dollars and years of repayment.
Consumer Credit Counseling Companies typically have a non-profit
status. Many consumers confuse "non-profit" with "no charge for
services", or charity. Non-profit Consumer Credit Counseling
Companies generate millions of dollars each month and employ
thousands of people. The way Credit Counseling works is that you
typically meet with a Credit Counselor who analyzes your unsecured
debts, other obligations, and your monthly income. A credit
counselor then formulates a monthly budget and presents a plan
that includes lowering of credit card interest rates and
sometimes, the monthly payment. The Credit Counseling Company then
contacts all your unsecured debt Creditors and requests that the
consumer be permitted to enter the bank's hardship repayment plan
at a lower interest rate. Most hardship plans are for a 12-18
month period. Note: most Consumer Credit Counseling programs run
48 – 60 months. During the program a single payment is sent to the
Credit Counseling company and they in turn make payments directly
to all your creditors for the next 48 – 60 months.
The consumer credit counselor charges what seems like a relatively
small fee. What you are not told is that the Credit Counseling
companies act as a surrogate of the Credit Card Company. They
make most of their money from "donations" from your Creditors
based on the amount they "collect" from you while in the program.
This is an arrangement very similar to the way collection
agencies are paid by creditors. So a credit counseling company may
not have your best interest at heart. These donations are the
primary purpose for these companies organizing under a
"non-profit" status (for-profit companies cannot receive
donations).
The downside to credit counseling is as follows:
· In a Credit Counseling program you pay the full amount of debt
owed at a hopefully reduced interest rate.
Credit counselors don't always make timely payments resulting in
late fees and a derogatory credit history.
Not all Creditors agree to reduce your interest.
Almost all Creditors require you to be at least 30 days late
before entering hardship programs (late payment history);
· Payments are still high and it typically takes 5 or 6 years to
pay off the debt.
Credit Counseling companies frequently advertise 50% lower monthly
payment, but this almost never happens. Even if it did happen,
smaller monthly payments would only string out the program period
and not get you out of debt;
Most Credit Counseling programs have a high failure rate.
· Many of these companies are funded by your creditors – the very
people to whom you owe money. In other words, they may not
represent your best interests.
· Additionally, your credit will have a CC or Credit Counseling
mark on it. This is viewed negatively by most lenders and may
hinder your ability to refinance a home or get a loan.
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Q:
How long does the debt settlement program take?
A. The time to complete the debt settlement program varies from
case to case and is primarily based upon how much money you will
be able to set aside each month to eliminate the debt of your
enrolled accounts. During your initial free consultation, the time
to complete the debt settlement program for your individual case
will be discussed with you by our debt specialist. Debt
Elimination Advisors’s™ average
client can be debt free in 12 - 36 months. The amount of time it
takes to clear your debts is largely dependent on your current
financial situation. If your budget is extremely limited results
may take longer. Every situation is different and we will be happy
to discuss this during your free confidential phone consultation.
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Q: What can I expect as a result of your debt settlement program?
A. Debt Elimination Advisors™ has assembled an impressive team of dedicated individuals
who work with one common goal… to save you money. Remember, Debt
Elimination Advisors’s™
debt settlement program is set up to work with your best interest
in mind. We have created a win-win relationship, by implementing
procedures to ensure the best results for our clients. As always,
getting you out of debt is our job… keeping you out is our
mission. You can expect a substantial reduction in what you owe to
your creditors. Although individual results will vary, you can
typically expect a reduction of 40% to 60% of the balance owed on
your total debt.
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Q: Are
your debt settlement services guaranteed?
A. Yes, if Debt Settlement America is unable to settle an enrolled
account, Debt Elimination Advisors™ will refund back to you or adjust your service fee
by an amount equal to the service fee charged on that particular
account balance at initial enrollment. Note: You must have
sufficient funds to settle the account in order to be eligible for
the guarantee.
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Q: How
will debt settlement affect my credit?
A Debt Settlement Program will have a negative effect on your
credit while in the program. If your accounts are already
delinquent it may not have much effect. For consumers with unpaid
delinquent accounts this makes debt settlement an excellent option
over ignoring the delinquent past due account, considering the
savings versus paying the past due account in full. The question
is, does debt settlement make sense for those who have current
accounts, and a good credit rating. Those with a high credit
score must weigh the negative impact on credit ratings against the
risk of bankruptcy and the potential of being debt free for less
than the full balance. Note: even if your accounts are current
your credit score may already be negatively impacted by your total
debt and debt to available credit ratio; in this case negotiation
of the accounts may still be a better alternative than making
minimum monthly payments for the next 30 years and still having
bad credit.
· While in a debt settlement program, you will receive late marks
on your credit as you are not making regular payments to your
creditors. Your consumer credit score will be negatively affected
during the delinquency period. This occurs for two reasons. First
the account is late and is continually reported to credit bureau
as the delinquency period extends (60, 90, 120 days). Secondly,
the amount listed in the payment due column increases as past due
payments stack up. If the accounts are current but the credit
score is low due to high balances or a history of late payments,
the negative effect on your credit is already affected in your
credit score.
· Once your account balance and payment due is settled and
reported as a zero balance, your debt to income ratio will be
reduced as long as you have not since incurred more debt. Low debt
to income ratios typically have a positive impact on accounts and
credit, particularly over the long-term. These paid/settled
accounts that are negotiated look much better on your credit
report than unpaid past due accounts. The history of the
delinquency may remain, but the account moves from the current
derogatory reporting section of the credit report, to the closed
account section. As months pass any derogatory history has less
and less bearing on the credit score. Some lenders believe that
after 12 months the accounts are given very little consideration.
It appears that provided all other debts are paid in a timely
manner (house, car, other accounts kept current) the effects of
the settlement process are temporary. Remember if you are
considering chapter 7 or 13 bankruptcy it will stay on your report
for 10 years.
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Q: How
does debt settlement compare to bankruptcy?
Filing for bankruptcy has many negative implications, and should
be considered only as a last resort. Bankruptcy may seem to be the
quickest solution to removing your outstanding debt but even
bankruptcy attorneys will tell you it will remain on your credit
for 10 years.
Both Chapter 7 and Chapter 13 will represent a major negative mark
on your credit rating. In Chapter 7 bankruptcy it will stay on
your report for 10 years and chapter 13 bankruptcy stays on your
report during the time you are in the bankruptcy program plus a
specified time calculated from the date you complete the program.
· Bankruptcy can cost up to $2,500 to file plus additional
attorney’s fees. Additionally in Chapter 13 there is a 5% trustee
fee for the administration of your chapter 13 bankruptcy
· In Chapter 13 bankruptcy the court decides what you can pay and
what your budget is.
· Bankruptcy may affect your ability to get a job if you work in
security or financial services or have duties involving financial
information.
· Bankruptcy will likely result in higher interest rates on future
loans and credit.
· Bankruptcy carries a negative stigma, mental stress, and other
burdens.
Besides being a devastating hit to your credit, bankruptcy can
also potentially affect current and future employment
opportunities for financial and security related jobs.
Additionally, Home lenders are now asking on loan applications,
"Have you ever filed for bankruptcy?" Even if the bankruptcy has
fallen off your credit report, answering "No" is considered a
federal offense if you have ever filed for bankruptcy. Thus
bankruptcy will follow you for the rest of your life. Bankruptcy
is a permanent decision that should only be considered as an
absolute last resort to solving your debt matters. If you decide
to file for bankruptcy, first seek the advice of a licensed
attorney. If you have enough discretionary income and wish to work
on resolving your debt over time, our Debt Settlement Program may
be a better alternative.
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Q: Does Debt Elimination Advisors keep my information
confidential?
A. Yes. Debt Settlement America maintains your confidentiality at
all times and is bound by "Rules of Professional Conduct." We only
disclose information to those persons that you have authorized.
All creditors that you have contracted us to settle with on your
behalf will be contacted by us and advised that you have retained
Debt Settlement America to represent you. All information is
considered highly confidential and personal. Please see our
Privacy Notice.
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Q: What is the difference between unsecured debt and secured debt?
A. Unsecured debt is any loan or debt that has no tangible assets
or property attached to it. The most common types of unsecured
debt are credit cards, department store cards, medical bills,
utility bills, and personal loans. Should you fail to make timely
payments, the lenders only recourse is to pursue legal action.
Secured debt is debt for which the creditor has collateral in the
form of a security interest in personal and/or real property.
Should you fail to make timely payments on secured debt, the
creditor is entitled to repossess the property and sell it. Please
keep in mind that you may still be liable for any deficient
balance remaining after the sale of the property. When Debt
Elimination Advisorsling
with secured debt, it is important to obtain advice from a
licensed attorney in order to protect your interests.
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Q: Will I continue to get calls and collection letters from my
creditors?
A. Yes you may. Most original creditors are cooperative. Usually,
the calls will reduce after the original creditor receives a
hardship letter from you. Eventually you may still have to put up
with their calls for another 30 to 150 days, because it takes time
for original creditors to update their records and this varies by
creditor. It is important that you review the section on how to
handle creditor calls in the program kit you receive as a new
client to minimize creditor harassment. You will also need to keep
a creditor log of every phone call or letter that you receive from
a creditor and report it to us. Once your account has been sold or
moved to a collection agency, collection calls can be stopped but
Debt Elimination Advisors must be made aware of the switch while you are in the program.
Note that despite our best efforts, there are dishonest collection
agencies that will not abide by a cease and desist letter and may
continue to call you. This is against the law and you can formally
complain should this continue. You should also know that accounts
are frequently moved or sold over time. We may prevent one
collection agency from contacting you. However, they may sell or
move your account to a new agency and the process will have to be
repeated to stop any new calls.
· See your rights under the Fair Debt Collection Practices Act &
Debt Collection Laws for your State
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Q: Will fees and interest continue to accrue?
· Most creditors will continue to charge fees and interest until
the account is written off (typically 120 – 210 days) in hopes of
making more profits from you in your time of financial hardship.
When our debt negotiators work out a settlement offer we attempt
to negotiate from a position of the principal amount you owe less
any fee accumulated during the settlement process.
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Q: Will your program stop legal action against me?
· Creditor lawsuits are not common, but creditors have the right
to use legal means to collect a debt. Some creditors are more
likely to file suit than others.
· Debt Elimination Advisors provides access to free and discounted legal services
through a legal plan to help Debt Elimination Advisorsl with any potential legal action.
· Creditor lawsuits are not common but they do happen. It is also
a common tactic of third-party creditors or collection agencies to
threaten you with a lawsuit (which is illegal if they do not
intend to sue). The reality is that third-party creditors or
collection agencies rarely ever sue. Furthermore, it takes time
and costs money to file. Lastly, even if a creditor is to take
legal action, they can only collect what you have. A wage
garnishment takes time and always hinges on your employment and
may not be applicable in your state. If you own a home it is
difficult for a creditor to attach the equity in your home and it
may be protected by your state’s homestead act. In conclusion, it
is typically more cost effective for a creditor to settle than to
pursue legal action. While we cannot guarantee that legal action
will not be taken, we are confident that our experience in Debt
Elimination Advisorsling
with creditors can reduce the possibility of this happening.
· Despite any legal action that may or may not be taken, your
account can be settled before, during or after the suit. Just
because an account goes to legal action does not mean that we
cannot settle it. The threat of legal action can be the scariest
of all. IT CAN BE HANDLED. We recommend that our clients seek
competent legal counsel in certain situations.
· Note: We cannot provide you with legal advice. We work with
your creditors to find a solution that will satisfy everyone
before legal action is taken and we provide access to free and
discounted legal services.
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Q: How can Debt Elimination Advisors's legal plan help me with legal action?
A. Free & Discounted legal assistance – While only a small
minority of clients will need this assistance, Debt Elimination
Advisors pays an ongoing
fee for each client’s access to a nationwide network of licensed,
rated, and insured lawyers to assist in defending against
collection agents and lawsuits. Free services include initial
phone calls, advice, letters and document review (up to six pages)
for each new legal matter. Extended legal care, if required, is
provided by a plan attorney at a significantly discounted hourly
rate. This service is an invaluable resource that is included in
Debt Elimination Advisors’s program for our client’s benefit to help them make it
successfully through the debt settlement program. Few other
companies offer this service or commitment to their clients. Learn
more by about this service by going here.
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Q: What if I'm sued and they get a Judgment?
A. Here are some facts; Right now in the United States there are
between 200 and 300 billion dollars of uncollected (Money Judgment
debt). The court does not require the debtor to pay, and will not
even help collect. Very few people know how to find these assets
or what to do when they are found. The result is that millions of
Judgments are just sitting in files. "Four of five winners of a
Judgment never see a dime." We negotiate all unsecured debts,
which include judgments. Regardless of what stage of collections
a debt is in, it can be negotiated.
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Q: Will I owe money to the IRS for my reduced settlement?
A. Creditors are required to report canceled debts exceeding $600
to the IRS and you are supposed to report the same as income on
your annual tax return. However, the IRS permits you to write off
any “income” from canceled debts up to the amount by which you
were “Insolvent” at the time. Therefore, unless you have a
positive net worth, then you ordinarily will not be obligated to
pay taxes on the forgiven amounts. Additionally, if you do not
qualify as insolvent non principal amounts such as fees
accumulated on the account may be deducted from the amount
reported. Refer to: www.IRS.gov Publication 908
· Note: You should consult a tax advisor for advice specific to
your situation. This should not be considered tax advice.
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Q: Who controls my personal savings used for settlement?
· Your personal savings account is a bank account that you control
and at the bank of your choice. Debt Elimination Advisors will contact you monthly to
ensure that you are depositing the minimum program savings amount
as set out in your settlement program. When you have accumulated
enough funds in your account our debt negotiators will begin the
negotiations process with your creditors.
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Q: So what does the program cost and how do you get paid?
· Our fees are very competitive, are based on a percentage of your
overall debt, and consist of an enrollment fee and a service fee.
We earn our enrollment fee as follows: when we perform a budget
review, analysis of your accounts, and file setup; when we have
prepared initial correspondence for the client to send to the
contracted creditors directly, and when we send the program kit to
the clients. The service fee is earned as we engage creditors for
settlement, handle creditor calls and communication, negotiate a
settlement of your contracted accounts and administer the
settlement and funding arrangements. If Debt Settlement America
is unable to settle an enrolled account, Debt Elimination Advisors™ will refund back to
you, an amount equal to the service fee charged on that particular
account balance at initial enrollment.
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Q: Who
is an Debt Elimination Advisors candidate for Debt Settlement?
· Someone who has some type of hardship such as (illness,
disability, divorce, job loss, or a reduction in pay) and is
having difficulty making payments.
· If you have past due credit card debt in excess of $10,000, with
high interest rates and are looking for a way out without filing
bankruptcy, debt settlement (also known as debt negotiation) may
be the best alternative.
· Someone with a debt problem that he or she cannot resolve.
· Someone who is having trouble staying current and is delinquent
on their accounts or is receiving collection calls or is close to
having suit for a judgment filed against them.
· Someone considering bankruptcy, but would like to avoid it.
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Q:
What is the affect of Debt on my Credit Rating?
Many people assume that making payments on time means they have
good credit and being late with payments causes bad credit.
Making consistently late payments will cause a bad credit rating,
but your payment history only accounts for 30% of your credit
score. Your make up of debt plays an almost equally important
role.
The make up of your debt can have a negative affect on your credit
score. Many people think they have "perfect credit" but in fact
have low credit scores and to a Creditor they have "bad credit".
We recommend you get a copy of your credit report before you
commit to any program.
Credit card accounts are the most common cause of negative impact
on your credit report:
Making minimum monthly payments for several months will decrease
your credit score.
Credit cards charged to their credit limit has a major impact on
your credit score.
Too many open accounts will decrease the credit score. Note: If
you close your open but zero balance accounts this may also
negatively impact your credit score if it causes your Total Debt
to Total Available Credit to be greater than 50%.
Too many recently opened accounts cause a decrease in credit
score.
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Q: Who pays my Creditors?
· Debt Settlement America DOES NOT disburse funds to your
creditors during the program. The purpose of our debt settlement
program is to settle your debts at a reduce amount to the
principal balance that is owed. Those in a debt settlement
program, are financially unable to make regular payments to
creditors and instead set aside money in savings to pay a
settlement are negotiated. If you can afford to keep paying off
your debts on your own, you should do so. Under the debt
settlement program, once you approve a negotiated settlement
offer, you will then make the payment directly to your creditors
from your personal savings account. Once the payment has been made
the account will now be considered settled in full.
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