Frequently Asked Questions
Q. When will I have my debts paid off?
The average debt settlement program lasts 2-4 years and the speed at which your program is finished depends entirely on how much money you apply to your program. Basically, you can only pay off debts when you have the money to pay them off. This is why it’s essential for you to build up your settlement account fund as fast as you can. Missing payments to your debt settlement program will hinder the negotiation process because there will be less funds to negotiate with. The more money you can add to your account, the quicker your accounts can be settled.
Q. Do I need to take out a loan to pay off all my debts?
No. The successful debt reduction program created does not involve you getting a loan. Of course you can always decide to obtain a consolidation loan to work alongside the debt negotiation program. Many folks have found that simply paying for their debt settlements with a monthly payment into their settlement savings accounts is the best option for them. You could also speed up the pay off process with a lump sum.
Q. What happens if I end up missing monthly payment to Accredited Debt Relief?
Am I going to be kicked out of the program?
No. Sometimes even with the best of plans you can’t account for emergencies. That’s no reason to be dropped from the program. One call to our customer service department and we’ll find a way to get you back on track. If you know in advance that there’s going to be a problem with a payment, give us 5 business days advanced notice and we can work out other arrangements. Keep in mind that we rely on you to make your monthly payments so that we can use that money to settle your accounts. If you miss a payment your debt relief program will be delayed and you could miss possible settlements.
Q. How many of my credit cards should I enroll in the program?
A single credit card with a low balance and low interest might be good to keep active for emergency situations. To get the full benefits out of this program, you’ll need to sign up with all your high balance credit card accounts. These would be the ones with amounts over $500. Our strongest bargaining chip is to show your creditors that you’re working on all of your debt, not just a few accounts.
Q. What about the bank account for settlement funds… who is in charge of that?
You are. When you set up your bank account you will do so in your name. It’s also your money. The idea behind setting up this new account is to keep a healthy distance from your current bank accounts. Believe it or not, separating your account can actually increase your chances of successfully completing the program on time.
Q. What about my credit scores?
The truth of the matter is that if you don’t make your required minimum payments to your creditors you could be considered in violation of your agreement. As such, they are within their rights to report this lack of payment to all of the consumer reporting agencies. If you can’t afford your payments and you stop making your required minimum payment this will happen if you’re signed up for our program or not. Any type of debt settlement plan can lower your credit score. You have to ask yourself what is more important? Getting out of debt or having a high credit score? You might discover that getting out of debt is the only way to rebuild that score.
Q. What about all the calls from collectors? Are they going to keep coming?
Thanks to tough federal and state laws you have rights against collection harassment. In the best case scenario those bill collectors will be calling a third party assisting with your debt relief and not you if they are looking to receive payment. We’re going to do whatever we can to stop those calls from coming to you.
Q. Am I going to owe taxes on whatever debt was forgiven?
Officially the Internal Revenue Service has determined that any forgiven debt should be considered as taxable income. That will mean you will have to pay taxes on that settlement at the end of the year. Surprisingly enough, the IRS can help in certain hardship cases. You’ll need to fill out Form 982 to describe your situation and apply for an exemption.
Q. Will I still be getting hit with interest and late fees on my accounts?
Part of your agreement with credit card companies allows for them to continue to add interest and late fees any time you fail to make payments. This means while you’re getting your settlement account set up and funded your credit card debt could go up. This is going to happen whether you make a minimum payment or not. Our goal is to secure significant reductions to your account balances no matter what kind of interest hikes or late fees have been added on.
Q. What if I want to do my own negotiating?
Nothing is stopping you. The better question would be why haven’t you up to this point? Sure you can fix your own car and fill out your own taxes but what if you get it wrong? That’s why people turn to professionals with years of experience to help them through such important matters like reducing debt.
Q. How soon do you start working with my creditors?
On the average negations begin within 1 to 2 weeks after you sign up with the program. These initial calls will be to let them know that you are entered into a partnership and you are working on reducing your debt. This also lets them know what company they should be calling to settle this debt and not you! Most of your creditors won’t get into the serious discussions of debt reduction until they know you are serious about paying them off. This can only be accomplished once you have established a settlement account and funded it properly. The first settlement usually happens within the first 6 to 9 months of the program. Note that fresh start clients could actually find their settlements happening faster because they aren’t paying fees until the settlement is negotiated.
Q. What happens if my creditors try to sue me?
A creditor is well within their rights to have your debt taken over by third party collection agencies and/or law firms. When something like this happens, we strive to continue working on your account. The difference is that we might move this particular account to a priority list. It has been our experience that many of these lawsuits are never actually filed. They just want a settlement. If a lawsuit does get filed against you we can attempt to resolve that account by setting up a specific payment plan. We are not a law firm and can’t offer any legal advice.
Q. Will you make any kind of guarantee to settle whatever I owe for a certain amount?
No. There are many factors in settling a debt and every case is different.
Q. What happens if any of my creditors won’t budge on a settlement?
In extreme cases when a creditor doesn’t want to settle the only option is to remove the card from the account. Adjustments in the fees will be made and you won’t have to pay if a settlement can’t be reached. The chances of this happening are rare. Most of the creditors you’re signed up with are happy to get some form of settlement, especially when you can show a hardship.