- Who qualifies for this debt settlement program?
- How do you apply?
- How will 800settlenow.com settle my debts?
- Is bankruptcy a better option for
me?
- Can I get a good
score again?
- Can I still use my credit cards if
I use this program?
- What will I pay for your debt settlement services?
- Can the creditors pursue legal action
against me?
- Can 800settlenow.com stop calls from creditors?
- Does 800settlenow.com repair my credit?
- Can my wages be garnished by my
creditors?
- Can't I negotiate the debt on my
own?
- What are the Tax Consequences?
1. Who qualifies for this program?
800settlenow.com's debt settlement program is only for people facing
financial hardship. Debt settlement programs are for people
who are late on paying their debts, are struggling with their
minimum monthly payments, or have little or no ability to
pay their debts in the future and are possibly facing bankruptcy.
This proactive approach is the most cost-effective option
for people facing hardships including but not limited to:
- Reduced income
- Job Loss
- Divorce
- Poor money management
- Underemployment
- Medical Expenses
2. How do
you apply?
Call our toll free number to speak with a consultant or complete
the form online. A debt consultant will review your information
and discuss your situation with you. After a debt consultant
has reviewed your financial situation and hardship they will
discuss all your available options for handling the debt and
determine if you are qualified for our program.
3. How will
800settlenow.com settle my debts?
We will set you up with an affordable monthly payment in line
with your income and expense budget and based on your total
amount of debt. This payment amount is determined on a client-by-client
basis between you and a debt consultant. Based upon what you
are able to pay each month into your settlement account, we
can determine how many months you will be part of the program,
and ultimately be debt free. Your payments are put aside in
your settlement account on a monthly basis. 800settlenow.com will
begin the negotiation process once you have accumulated enough
settlement funds to make a reasonable offer to your creditors
to settle the debt. Once a creditor agrees to a settlement
amount, the settlement offer will be presented to you. If
you approve of the settlement, the creditor will fax over
the 'settlement offer' in writing. Finally, our negotiations
department will arrange a three way recorded conversation
with you, the creditor and us to settle the account. Debts
can be settled in two different ways. They can be paid either
in one lump sum or a term settlement paid over an extended
period of time. 800settlenow.com settles each of your accounts individually
until all of your debts have been paid and you are debt free.
4. Is bankruptcy
a better option for me?
Filing for bankruptcy has serious consequences and should
not be entered into lightly. Having your debts erased doesn't
miraculously solve your long-term financial problems. The
Bankruptcy Abuse Prevention and Consumer Protection Act of
2005 made major changes to bankruptcy laws, making it more
difficult for many people to erase debts by filing for bankruptcy.
These changes were prompted by years of complaints by banks
and other financial institutions who believed that the bankruptcy
laws had been abused by many consumers. Many people now will
not be able to eliminate their debt by simply filing for Chapter
7. Many may now be required to file Chapter 13, which requires
you pay back a portion of your debt under the supervision
of the court. Filing for Bankruptcy, regardless of whether
you file Chapter 7 or Chapter 13 will have long lasting negative
effects on your credit history and public record for up to
10 years. The negative marks of bankruptcy on your credit
may make it difficult to apply for future credit, secure jobs
that require a positive credit profile, rent an apartment,
purchase a vehicle, etc.
5. Can I
get a good score again?
Your credit score will be negatively affected upon entering
this program. The level of effect will depend on your original
credit profile. If you are already delinquent on your accounts,
a debt settlement program may not have much effect since the
accounts are already reporting derogatory on your credit report.
If you have delinquent unpaid accounts, debt settlement may
be an excellent option to resolve the unpaid balances. If
your accounts are still in good standing, debt settlement
will have a temporary negative effect on your credit score.
Your creditors will continue to report your accounts as "past
due", "charged off", or "in collections"
until the debt is settled. Settled accounts with a zero balance
are positive compared to unresolved delinquent debts or bankruptcy.
After all the debts have been settled and paid, your credit
score should begin to improve since the negative items have
been resolved. There are several factors used to determine
your credit score including your debt amount, balance to limit
ratio, payment history, length of credit history, and types
of accounts. Although your payment history will be affected
with a debt settlement program, your debt amount and balance
to limit ratios will be greatly improved. As each of your
accounts are settled throughout the debt settlement program
you are then free to rebuild your payment history on your
new or existing accounts and rebuild a solid credit profile.
A high credit score is desirable to have, but if you are facing
a financial hardship and are unable to pay your accounts,
then your first priority should be to pay your delinquent
debts and get back on your feet financially.
6. Can I
still use my credit cards if I use this program?
Any account that you enroll in the program will no longer
be active. Any cards you do not put into the program should
only be used for emergency purposes. This program is for you
to get out of debt to get you back on your feet financially.
7. What will
I pay for your services?
800settlenow.com has a 14% fee that is calculated based on the total
amount of debt that a person brings into the program. The
program typically requires one or two initial down payments
for the first or second month. Thereafter, the remaining service
fees are paid throughout a portion of the program term and
included in the regular monthly payments. Some companies may
advertise as "non-profit" although that is not a
guarantee that the services provided are free or even legitimate.
Many companies recently have lost their IRS non-profit tax
status due to abuses of their "non-profit" designation.
Our fees are always fully disclosed and you are required to
sign for approval before you commit to our program.
8. Can the
creditors pursue legal action against me?
Lawsuits are not common but your creditors certainly have
the right to pursue legal action to recover their money. In
our experience, most creditors would rather not go to the
expense of suing and simply try to negotiate a settlement.
The threat of lawsuits is a common tactic of aggressive creditors
or collection agencies. The reality is that such action rarely
occurs. It takes time and costs money to file a lawsuit and
even more to collect on a judgment. A wage garnishment takes
time, depends heavily on your employment, and may not even
be applicable in your state. If you own a home it is difficult
for a creditor to attach a lien to your home and your home
may be protected by your state's homestead act. It is typically
more cost effective for a creditor to settle on an account
than to pursue legal action. Creditors realize that if they
push you too hard they run risk of you filing for bankruptcy,
in which case they often receive nothing.
9. Can 800settlenow.com stop calls from creditors?
Your creditors have the right to try and contact you in order
to collect a debt. For the first few months of the program
you may still receive calls from your creditors inquiring
about your accounts but the calls will eventually decrease
or stop altogether. We have been successful however in eliminating
most harassing telephone calls. You have rights and protection
under The Fair Debt Collection Practices Act (FDCPA) and our
client services department makes sure you are informed of
these rights. If your account is in collections, collections
agencies have to adhere to the FDCPA Guidelines. Under the
Fair Debt Collection Practices Act:
- Debt collectors may contact you only between 8 a.m. and
9 p.m.
- Debt collectors may not contact you at work if they know
your employer disapproves.
- Debt collectors may not harass, oppress, or abuse you.
- Debt collectors may not lie when collecting debts, such
as falsely implying that you have committed a crime.
- Debt collectors must identify themselves to you on the
phone.
- Debt collectors must stop contacting you if you ask them
to do so in writing.
10. Does
800settlenow.com repair my credit?
NO. 800settlenow.com's goal is to eliminate your debt and does not
engage in credit repair services. Negative items will remain
on your credit report according to the conditions imposed
by the credit bureaus. Settled accounts with a zero balance
are positive compared to unresolved delinquent debts or bankruptcy.
After all your debts have been settled and paid, your credit
score should begin to improve since the negative items have
been resolved. There are several factors used to determine
your credit score including your debt amount, balance to limit
ratio, payment history, length of credit history, and types
of accounts. Although your payment history will be affected
with a debt settlement program, your debt amount and balance
to limit ratios will be greatly improved. As each of your
accounts are settled throughout the debt settlement program
you are then free to rebuild your payment history on your
new or existing accounts and rebuild a solid credit profile.
11. Can my wages be garnished
by my creditors?
Creditors have the right to pursue legal action and perhaps
ultimately a wage garnishment to recover their money although
it is rare and can be a long process for the creditors.
The creditor first has to spend the time and money to file
a lawsuit, successfully obtain a judgment, and then file
for a garnishment action. In addition, a wage garnishment
depends heavily on your employment, and may not even be
applicable in your state. If you're willing to work with
your creditors, any legal action, including wage garnishment
can normally be avoided.
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12. Can't
I negotiate the debt on my own?
YES, you can always attempt to negotiate your debts with your
creditors on your own. However, the debt settlement process
can be a long and complex process for the average person especially
when dealing with multiple creditors. 800settlenow.com already has
working relationships with each of your creditors and years
of experience negotiating the most beneficial settlements
for our clients. With our program you don't have to spend
all of the time and effort trying to negotiate with your creditors
on your own and you can rely on our experience to get the
best settlement for you.
13. What
are the tax consequences?
Your creditors may provide a form 1099-C for cancelled or
settled debt exceeding $600 which you are required to report
to the IRS. The forgiven debt may be reported as income on
your annual tax return. This does not necessarily mean that
you will owe taxes on the forgiven portion of the debt. The
IRS permits individuals to legally exclude forgiven debt from
their income through the "insolvency exclusion".
This permits you to write off any forgiven debts up to the
amount by which you were "insolvent" at the time.
If your total debt and liabilities exceed the fair market
value of all your assets, you would ordinarily qualify for
the exclusion. We recommend that you consult your tax advisor
for advice specific to your situation. They will also be able
to assist you on filling out IRS Form 982 to get the exclusion.
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