FAQ
Q: Can a person achieve these credit card debt settlements on their own or do they need to hire a Debt Settlement Company to get out of credit card debt?
A: While it is certainly possible for someone to achieve a credit card debt settlement on their own, the law requires that we let all consumers know that they can do it themselves. Please refer to the CROA, FTC and FCRA. But as with anything, sometimes the best help is having others who are professionals trained to help you.
Q: What is the difference between a debt settlement and a debt consolidation for reduction or elimination of credit card debt and other unsecured debt?
A: For the context of this discussion, we will refer to a credit card debt settlement as a negotiated settlement of credit card debt. For example, if you owed $5,000 on a credit card and made an agreement with the credit card company to pay $2,000 instead of $5,000 as a settlement in full on the debt, this would be a credit card settlement. However, I define debt consolidation as a reorganization of the debt through a credit counselor or taking a debt consolidation loan to pay off the debts in full. Other FAQ’s on this site address each of these debt elimination options individually.
Q: How does debt settlement compare to bankruptcy?
A: Filing for bankruptcy has many negative implications, and should be considered only as a last resort. Bankruptcy may seem the quickest solution to removing your outstanding debt, and bankruptcy attorneys will tell you it will only remain on your credit for 7-10 years. Besides being a devastating hit to your credit, it can also affect things like your ability to get a job. Home lenders are now asking, “Have you ever filed for bankruptcy?” Even if the bankruptcy has fallen off your credit report, to answer this question untruthfully is considered a federal offense. Which means 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 or a licensed attorney. If you have enough discrepancy income and wish to work on resolving your debt over time, our debt settlement program may be a better alternative.
Q: How does debt settlement differ from consumer credit counseling services (CCCS)?
A: CCCS companies do not reduce the total debt you owe, they sell you on the concept of combining your total monthly payments into one payment, which is often higher than your regular monthly minimums. For most people seeking debt assistance, immediate monthly cash relief is what they need. This forum doesn’t necessarily provide monthly relief, and as consumers soon find out, the new payment has a relatively minute impact on the total outstanding balances. Hence, the 4-6 year plan they were originally on turns out to be much longer.
Q: Who is eligible for a debt settlement to get out of credit card debt?
A: Creditors agree to debt reduction arrangements where they feel a settlement of the debt will be in their best interest. In most cases they come to this conclusion because the person requesting the debt negotiation appears to be a legitimate candidate for bankruptcy. Knowing that in most bankruptcy cases they would receive nothing, they opt to take a discounted settlement on the debt rather than receive zero dollars in a bankruptcy.
Q: How much can your company get my creditors to settle for?
A: Most credit card debt accounts settle in a range of 45 to 50%. Be aware that some credit card debt accounts may settle considerably higher reaching into the 75 to 80% range while in rare cases credit card debt accounts can be settled in the 20 to 30% range. In very rare cases for as little as 5 to 10% or as much as 90 to 95%. We cannot guarantee how much we will save you, but we do have relationships with many collection agencies, and our highly trained staff will work to get you the lowest possible settlement. Plus, our unique settlement programs work like no others companies.
Q: How do settlements affect someone’s credit?
A: It depends on the status of your credit before the program. Let’s imagine that credit report scores run on a scale of one to ten, one being the best. Only ranks of one and two are good enough to walk into your local bank to get a loan or credit card. Someone who has done a credit card debt settlement would be considered to be about a six immediately after the pay off of the credit card. For someone who started at a one or two, this would be a dramatic devastation of their credit. Anyone with good credit will be essentially destroyed. On the other hand, if an individual already shows multiple accounts on their credit report that have been charged off by creditors they may already have a credit score of approximately nine. For these people settling the charge off accounts through debt settlements would actually help their credit. This does not mean it will make their credit good, it just means it will improve it from very very bad to simply better.
Q. Why would someone want to stretch the credit card debt negotiation process longer?
A: In order to get more time to get debt settlement funds accumulated. For many people the only options to get out of debt are four-year settlement times or bankruptcy.
Q: Are there any downsides to lengthening the credit card debt negotiation process?
A: 1. As time goes on interest builds on the outstanding credit card debt. Even if the credit card debt ends up being settled for 50% interest building at 20% on the total outstanding credit card debt still means a significant increase in what you will pay as a debt reduction settlement.
2. At some point you will want to begin rebuilding your credit. This process cannot and should not begin until all of the old credit card debts have all been settled.
3. Your own personal situation or creditor policies can change so that a credit card debt settlement, which might be archived now, can no longer be reached in the future.
4. The longer things go after the credit card company has started litigation in the court system the more likely it becomes that a creditor will refuse to participate in your debt settlement plan and you must settle a credit card account for more than you might want to or you will face a court hearing and its consequences and its garnishment.
Q: Is it better to accumulate settlement funds on my own or allow the debt management firm to keep them in escrow for me?
A: Some companies prefer that they keep the money in escrow. We however use an outside company that will specifically set up a separate account for you, that is only used to settle your debts. Neither they nor our company have access to any of your other accounts. Plus only you and the Financial Company have access to the settlement account.
Q: Can these credit card debt settlement firms stop creditor lawsuits the way a bankruptcy filing can?
A: No. Debt management firms can only stop credit card companies by having them agree to a negotiated debt settlement or a delay in the litigation. They cannot force them to do anything.
Q: What happens if the creditor wants to precede in the courts to collect the debt?
A: In most of these cases the impending court action acts as a catalyst to speed a debt settlement; in some cases the pressure even produces higher debt settlement figures for the creditor. In some cases the creditor gets a judgment but nothing else happens. In some cases the creditor gets a judgment and attempts a wage garnishment or other further court action to get the debtor to pay off the debt. In some cases the court action forces the debtor into filing a bankruptcy as a debt solution.
Q: What happens if I miss a payment while in your program?
A: Things can be much more flexible than they would be with a creditor, but to stay on the plan you will have to make the payments.
Q: Will I still get debt collection calls from the creditors?
A: Creditors debt collection calls should go straight to our firm. Sometimes you will get a debt collection call by mistake and sometimes the creditors will try to sneak around the debt settlement firm. Once you have hired us, simply tell any creditor that does call you that you have hired a firm to help. Give our firm’s name, instruct them to call us and politely hang up the phone. Do not engage in a conversation with the creditor or their debt collector.
Q: What if the creditor and debt collectors keep calling me even after I have told them to stop?
A: They may become liable for damages under the Fair Debt Collection Act.
Q: Will I continue to get calls and collection letters from my creditors?
A: Once accepted into the debt settlement program, we will contact your creditors and request that they cease communications with you. We will also inform them to direct all further calls to our office. It is really a team activity, between you and Credit Cures, to eliminate the calls. Sometimes, a creditor will continue to call you until we tell them to call us, and they change the phone number in their computer to Credit Cure’s phone number. It usually takes about 30-45 days for them to stop contacting you. In the meantime, you will keep a creditor log of every phone call or letter that you receive from a creditor and report it to us. We will contact them and make every attempt to redirect their calls to our office.
Q: Will your program stop legal action against me?
A: No, but 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, but it can be handled.
Q: What if I’m sued and they get a judgment?
A: Here’s some facts: Right now in the United States there is between 200 and 300 billion dollars of uncollected money judgment debt. The court does not require the loser to pay. The court 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.
Q: How long does the debt settlement program take?
A: The length of time necessary 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 fee consultation, the time to complete the debt settlement program for your individual case will be discussed with you by our debt specialist. Credit Cures average client can be debt free in 3-36 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 conversation.
Q: When does Credit Cures begin settling my debt?
A: Once you have fully retained our services, your creditors will be notified immediately and we will begin the settlement process. However, we can only settle a debt once the full funds are available in your settlement account.
. Q: I have a flexible monthly income. Can I still participate in the program?
A: Yes. Our fees and payment schedule is on a client-by-client basis. We will figure an affordable and simple plan for your unique situation.
Q: Will I still pay my creditors directly while in the program?
A: No. Upon enrollment, you will stop paying your creditors immediately. We will be negotiating on your behalf, so you will pay your creditors directly from your settlement account.
Q: Will my creditors continue to contact me by mail?
A: Your creditors may also attempt to correspond with you by mail, however, you will then immediately contact Credit Cures and report this correspondence. We will handle all of your creditors and collectors on your behalf.
Q: Will this program have a negative effect on my credit?
A: The debt settlement program may have a short-term negative effect on our credit profile. However, once negotiated and settled, your creditors will report the accounts as ’settled’ or ’paid in full.’ Once you have completed the program and you are debt-free we have affiliate companies available to help you re -establish your credit profile.
Q: Why should I use Credit Cures to settle my debts as opposed to handling it myself?
A: Our team has extensive experience in negotiating debt and working with creditors. We have an impeccable relationship with creditors and collection agencies, who are usually unwavering in negotiating with the consumer directly. Our team has extensive knowledge in consumer debt and the Fair Credit Reporting Act, as well as the Fair Debt Collection Practices Act.
Q: Whom do I call if I have a question about the program or a problem with a creditor?
A: Upon enrollment, you will be given an account number and be assigned to an account representative who will be handling your case. You can talk directly with any account representative whenever you need to discuss a problem or concern.
Q: Do I have to include all of my creditors into the program for settlement?
A: No. We recommend that you keep open at least one credit card. Any accounts that are included in the settlement will have to be closed immediately. Creditors won’t settle accounts that are still open. You should keep one credit card open for emergency use only. Plus, we cannot stress this enough: If your accounts are not charged-off, and are not in collections, you should keep paying them. We cannot, and do not suggest or tell any consumer to stop paying their bills. If a settlement company does tell you that, it should be a clear indication to you that they are not working in your best interest.
Q: What if my creditors won’t settle?
A: Creditors know that if they don’t settle for even a fraction of the debt, they will most likely get nothing. Creditors aren’t dumb and they know that at a certain point, they have to take what they can get! Most of them will settle very quickly, wouldn’t you? In the rare event that a creditor won’t settle with our offer, they will return with a counter offer that will be favorable to you. Creditors know that if you declare bankruptcy, then they will get absolutely nothing, and that is what they are trying to avoid.
Q: Will Credit Cures stop late fees and interest from accruing on my accounts?
A: Credit Cures cannot stop a creditor from adding interest or late fees to an account. However, your individual program will reflect those fees and/or interest, and is incorporated into the settlement program. Because we negotiate the debt down to a fraction of what you owe, your savings are far greater than any interest or late fees that could accrue.