Frequently Asked Questions About Debt Relief and Settlement

Here are some common questions about debt relief and settlement.

What is debt relief?

Debt relief is a way to negotiate with your creditors in order to settle your debts for less than you owe without permanently damaging your credit.

Does my debt qualify?

Only unsecured debts such as personal loans, utility bills, medical bills, and credit card bills qualify. Secured debts like mortgages, student and car loans, and child support cannot be negotiated.

What is the difference between debt relief and debt consolidation?

Debt relief eliminates the debt. Debt consolidation combines all of your debts into one monthly payment. While you can receive lower interest rates with debt consolidation, you will still be paying the entire amount owed.

How long will it take before my debt is paid off?

This depends on how much debt you have, how willing your creditors are to negotiate the pay-off amount, and how much you can afford to pay. The typical time period from start of negotiations to final payoff is about a year.

How will this affect my credit?

Again, this depends on many factors, including what your credit score was at the beginning of the program. But anything you do to reduce your debt, other than paying it outright, will have some impact on your credit score. Talk to one of our representatives for more information.

Is there any penalty if I pay my debt off faster than the program's schedule?

None whatsoever. The faster you get out of debt, the better.

Wouldn't it be easier just to file for bankruptcy?

Bankruptcy should be a last resort. It will stay on your credit report for ten years, and the consequences of filing can affect your insurance premiums and your ability to obtain certain jobs. Plus, the filing and attorneys' fees for bankruptcy can be quite expensive as well.

What happens if I miss a payment?

We understand that you are going through some tough times. Talk to your representative about any fears you may have. We can help you regain your confidence.

Should I put all of my credit cards into the program?

That's entirely up to you. If you have a credit card that you want to set aside for emergencies, make sure you can make the monthly payments and pay off the balance. Then keep it in a safe place and use it only for emergencies. It would be even better if you establish an emergency savings fund and use that instead of a credit card.