LEGALLY SETTLE DEBT
1 (800) 369-2835
info@legallysettledebt.com
  

Q.  What is the difference between debt reduction and debt consolidation?

A.  Debt reduction is the process of lowering your principal balance and interest rates to less than you currently owe. This process is usually complete and your entire debt is paid off in a 12-36 month period. For example, if your debt amount is $30,000, we can generally get it reduced on average to $15,000. This figure includes the amount you owe and interest. Debt Consolidation involves qualifying for a new a loan from a bank to consolidate all of your outstanding unsecured debts. The typical interest rate associated with Debt Consolidation is 12%. For example, if your debt amount is $30,000, you will pay the entire $30,000 principal balance back plus 12% interest. The usual payoff time frame is 5-7 years with a debt consolidation loan and your combined payment to eliminate the debt would be close to $40,040.01.

Q.  What is a settlement?

A   Settlement is an agreement made by our attorneys or negotiators on your behalf with your banks or credit card companies stating that they are willing to take a lesser amount of money than you currently owe them and consider it a full payment with a zero balance reporting on your account.

Q.  Why would my creditors be willing to accept less money that what I actually owe them?
 
A.  Because your debt is unsecured they essentially are left with little or no choice. They are left with the option of you filing for Bankruptcy and them receiving nothing or they can take a loss and at least recoup a portion of what they lent to you. Our attorneys and negotiators have a personal history of dealing with major creditors and lenders that have come to realize that clients who are enrolled into our debt reduction program are more likely to fulfill the settlement amount than clients whom are not enrolled into our program.

Q.  Will the creditors continue to call me?

A.  No company can stop all of the creditor calls, so if a company claims they can, be very careful! Your creditors do have a legal right to call and try to collect the debt from you. However, there are several things we do to combat and eliminate roughly 95% of these phone calls. We will supply you with a creditor call script so if a creditor does call you can be assured of what you need to say to them before offering them our phone number. We will also send out cease and desist letters to your creditors so they are informed that you have enrolled into our program and to contact us directly to work out a new payment arrangement.

Q. Can a debt collector call me late at night?

A. No, collectors are required to follow the rules under the Fair Debt Collections Practices Act (FDCPA) section 805. Under this act the collector is required to know what time zone you live in and can only call you between 8:00 a.m. and 9:00 p.m., violations can result in fines and possible law suit against the collection company. If they violate this make sure you keep records of when they called and whom you spoke too.

Q. Will my creditor call me at work?

A. They may attempt to contact you at work, however, once you verbally ask them to refrain from calling you at work, they are obligated to cease.

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 settlement accounts that are still open. You should keep one credit card open for emergency use only. Please be sure that the card you keep out of the program does not have same issuing banks as any included in the program. (This will negatively affect our negotiating power).



Q.  Will my credit card accounts be closed if I enroll them into a debt reduction program?

A.  Yes, the accounts that you choose to enroll into the debt negotiation program will be closed. It is impossible for us to obtain settlements from your creditors if you are still using the accounts and making timely payments.

Q.  Does the Fair Debt Collections Practices Act apply to major credit card banks?

A.  No, it only applies to the professional debt collection companies or collections attorneys the major credit card banks hire. The original creditors are regulated by state law but major credit card companies follow policies close to those of the FDCPA and will comply with your request to stop phoning you at home or work. If feel the original credit card company and not the attorney or collections company is harassing you then you need to research your state laws and file a complaint. Typically, the Attorney General in your state is the proper authority to contact. You will find a link to all of the Attorney Generals Offices by clicking on the link in this sentence.

Q.  A collector called me and told me that he was going to call my employer and have my wages garnished. Can they do this ?

A.  You are entitled to due process under The Constitution of the United States. This means a collector must sue you first and the matter must be heard in front of a judge. If the case goes against you then the judge will issue a judgment, at this point the collector must go back to the court and request a writ of garnishment. Your employer will not garnish your wages until he receive an official document from the court ordering him to do so. This is the procedure in most states; if you find yourself in this situation you should contact us immediately.

Q.  Does the debt collector have to accept my partial payments?

A.  No, they usually claim that they can't and pressure you into a full payment. They will use very aggressive tactics to scare you in to paying the debt in full as quickly as possible. Never pay them a token payment just to satisfy the collector on the phone and never give anyone your bank account information over the phone. Dishonest collectors have been known to hit someone's bank account more than once which could overdraft your account. Always demand any agreement in writing first before paying a collector, if they refuse to send you it in writing first then hang-up.

Q.  If the collections company agrees over the phone to my terms why should I use an attorney instead of myself ?

A.  You could but the debt collections industry is tricky and an inexperienced debtor can unknowingly make some big mistakes, particularly since the collection industry has a high-turnover rate. Another collector might take over your account or your account might be sold to a third party. Be aware that even a written agreement might not be enforceable if your account is sold to another collection agency. The agreement is not enforceable against the new company unless they choose to accept it. Hiring an attorney to represent you requires the collections company under the FDCPA to deal with your attorney and stop harassing you or possibly find they can sued. Fair Debt Collections Act

Q.   How long does it take to enroll into your debt reduction program?

A.  Once you have discussed your financial situation with our consultants you can immediately enroll into the debt reduction program that best fits your needs and start benefiting from lower monthly payments.

Q.  Can I negotiate my debts with the creditors myself?

A.  Sure, some people have attempted and found success with it, while most others would rather leave it up to an attorney or negotiator. Remember, you are going up against a professional collector who makes a living off of collecting debts and may not take an individual as seriously as an attorney or professional negotiator who is officially representing the client.

Q.  What types of debts qualify for your debt reduction program?

A.  We work with most unsecured debts, such as credit cards, gas cards, department store cards, personal loans, repossessed car loans, medical bills, etc.

Q.  Can I still use a credit card I have in the program?

A.  NO. Any account in the program will be requested to be closed during American Debt Control's initial contact with your creditors, or if they are one we don't contact, they will typically just close it anyway. If you have a credit card account not enrolled in the program but is issued by the same bank or credit card company as a card that is in the program, the creditor will most likely close it as well. Also, some companies check your credit report and can increase the percentage rate even if you have never been late with payments on accounts that are left out of the program.

Q.   Will I still receive monthly statements from the creditors, and will they still charge interest and late fees?

A.  YES. Most creditors will continue to send statements as long as the debt is outstanding. Once an account is settled, you will no longer receive statements. We ask that you only send in statements in the beginning of the program to verify balances. You do not need to continue to send in statements. We only need collection letters. Your creditors will also continue to charge interest and late fees as another form of intimidation to keep you doing exactly what they want – sending payments to them every month for the next 20–30 years. When we begin the settlement process, your Settlement Advisor will negotiate everything at that time.

Q.  Are all the accounts settled at the very end of the program?

A.  NO. You will use your trust account funds to settle each account, one at a time throughout the program, as soon as there are sufficient funds available for us to begin negotiations. Our Settlement Advisors may sometimes contact you before you have the necessary funds available to see if you might be able to come up with monies for outstanding settlement offers. Your Settlement Advisor will assist you in deciding on the accounts and in the order that is the best for your situation. If you ever do come into funds faster than what the program lays out, this is always a good thing and will only help you get out of debt faster.

Q.  What about Lawsuits or Arbitration? Can I be sued?

A.  Lawsuits are far less common in debt matters than most people think. Some people may fall behind and not make payments to their creditors for years and never hear from a single attorney. Of course, the bank has the right to sue you to recover their money. Generally, however, the banks would much rather work out a solution than sue. Lawsuits are very costly for creditors. In most situations, a creditor sues because they want action on that account. Less than 2% of our clients' enrolled accounts have lawsuits against them. Our Settlement Team is still able to achieve options and/or a settlement from the creditor who decides to sue. Do not let lawsuits or the threat of a lawsuit intimidate you, but rather use them to your advantage. We can still call the law office or attorney to work negotiations for a settlement. Of course, please save any and all correspondence you receive from your creditors and forward a copy to your Customer Care Representative immediately. Please remember, when faxing correspondence to us, you must include a cover sheet noting Attention: Your Customer Care Rep's Name. Also, please remember to include your name and telephone number.

Q.  Can I shorten the program for the settlement of my accounts?

A.  YES. The pace of the settlement is based on the availability of funds. If you are able to come up with additional funds such as 401(k)s, loans from family members, garage sales or selling assets, you can settle your debts in a shorter time frame. It is to your advantage to do so. You can also shorten the program by disciplining yourself to add more money to your monthly trust account. The faster you accumulate funds in that account, the faster We can begin settlement negotiations. Also, if you have funds right at the beginning, remember, your accounts must age a bit before they are ready to settle. Please be patient and let the process run its course.

Q.  What should I do with any letters or correspondence I receive from my creditors or collection agencies?

A.  Some of the letters you receive require a response from our office and are time-sensitive material. Others may not be as time sensitive and may not require any response. Therefore, any written correspondence you receive should be immediately forwarded to your Customer Care Representative for a determination of the required reply, if any. When in doubt, FAX it over! Let us take a look at the letter, and we will respond or assist you in responding accordingly.

Q.  Who controls the monthly savings account allocation to ultimately settle the accounts with my creditors?

A.  You do! No funds can be dispursed for settlement without your consent. The Account is set up as your individual trust account.  Once funds start to accumulate in that account and enough is accumulated our negotiators will begin contacting the appropriate account to begin negotiations. Once we get offers, we will call you for final approval. If you agree to the settlement amount, We will request a settlement letter for the dollar amount agreed upon in order to settle your outstanding balance. You will then approve the dispursement of the funds from your personal trust account. Typically, the creditors will require these funds to be in their office within seven to ten business days from the receipt of the settlement offer, some faster. Your Settlement Advisor will discuss the particulars of each settlement as they occur.

Q.  Are you making payments to my creditors?

A.  No. When you choose to settle a debt, versus paying the balance in full, a creditor will only negotiate on an account that is in a past-due status. You have a personal trust account where funds accumulate, and we use those funds to negotiate settlement on your behalf. Monthly payments are not sent in to your creditors; they are receiving an agreed-upon lump-sum cash settlement once your funds are available.

Q.  Will this affect my credit report?

A.  Honestly, anything you do will affect your credit report. This is hitting the unsecured payment-history side of your credit report. Your credit scores will decrease as more late payments are reported. Once we start to settle the accounts your scores will begin to increase. We also offer credit repair to clean up your credit throughout the program, It is not difficult for us to remove the lates from your credit report once the accounts are closed. Once the program is completed (If you choose to also do the credit repair) your credit scores should be higher than they are today .If you are at the point where you're considering an option to settle your debt, then your credit report shouldn't be a concern until your debt is addressed. You have to weigh what keeps you up at night, a good credit report or the credit card debt.

Q.  Do you hold onto my settlement funds?

A.  No, they are in a trust fund set up through a third party called Note World.

Q.   Do I receive a 1099 after my account settles?

A.  If the savings is more than $600, then yes, you will probably receive a 1099. You will need to seek the advice of a tax expert. However, with a good majority of our clients, they are insolvent, which means they have more in unsecured debt than they do in assets. Again, seeking advice from a tax expert is the best way to go. The IRS form 1082 should be filed with your tax return to legally reduce any liability you may have for those taxes. Reduction of Tax Attributes Due to Discharge of Indebtedness and Section 1082 Basis Adjustment Form 982 OMB No 1545 0046 Rev February 2008 ...

Disclaimer
We do not provide tax or investment advice. If you need tax assistance, you must seek the advice of a  CPA or certified tax preparer. Individual results may vary.

Q. When does the Attorney begin settling my debt?

A. Once you have fully retained our services, your creditors will be notified immediately and the Attorney will begin negotiations. However we can only settle a debt once the full funds are available.

Q. If I miss a monthly payment,  will I be dropped from your program?

A. No. Simply call our customer service department seven (7) business days prior to your debit date and our customer service department will make alternative arrangements with you. It is understandable that circumstances may arise and we will help you get back on track with your payment schedule.

Q. How do I find out the progress of my debt settlement?

A. You can call our customer care department at the number on you contract/agreement Monday thru Friday from 8:00am to 6:00pm Eastern Standard Time to speak with a representative. You will also receive statements that will keep you informed of the status of your account upon request to the customer care department.

Q. Will my creditors continue to contact me by mail?

A. Your creditors may also attempt to correspond with you by mail, this is allowed. We strongly recommend you forward / fax any correspondence and statements to our office as well.

Q. Why should I use an Attorney to settle my debts instead of handling it myself ?

A. Our team has extensive experience in negotiating debt 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.

Q. Who do I call if I have a question about the program or problem with a creditor?

A. You will talk directly with our customer service department and any representative will have access to your file.

Q. How long will it take for me to settle my debt?

A. It typically takes about 12-60 months, including all fees... However, it could be much sooner depending on your individual program.

Q. How much does this program cost?

A. Our Debt Settlement Program costs are based on percentage of your total debt. Your monthly payment will de determined by what you can comfortably afford, and is based upon your level of debt, income, and living expenses.
 Our total cost is the lowest in the industry. We have never seen one lower.

Q. Will late fees and interest stop accruing on my accounts?

A. We 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. Because we negotiate the debt down to a fraction of what you owe, your saving are far greater than any interest or late fees that could accrue.

Q. How do I pay for these settlements, how does it work?

A. We work out a monthly amount that each client can afford to pay. That amount is electronically debited from their personal bank account and deposited into their "settlement account" in a trust account through Note World on the day of the month you choose. 

When the client has accumulated enough money to cover the settlement and our fee, we contact one of the creditors and make them an offer. Offers are submitted until both the client and the creditor agree on the amount. We then get the client's written or electronic approval on the total settlement (including fees). Upon receipt of the client approval, Note World will release the funds necessary to cover the total settlement (including fees). Once this settlement is paid, the client will begin the accumulation of funds in their settlement account and the process will repeat as money becomes available for the next settlement. We continue in this way until all of the accounts are settled.

It is important to note that we do not make any monthly payments to the creditors and we cannot pay for a settlement without our client's written or electronic approval.

Our primary thrust is to help our clients get out of debt as quickly as possible and to get firmly back on their financial feet. Credit, while a very important thing to have and maintain, is of secondary importance to getting your debt under control and becoming financially solvent. Most people think if they have stayed current on their payments then they have good credit. In cases where the debt is more than a person can afford, then their credit has been used up and they are no longer really credit worthy in the eyes of most lenders. At the end of our program, your debt-to-income ratio will be greatly improved and you will once again be able to build really good credit