Q: Does my debt have to be past due or bad to be put in your program?
A: No. Our program is designed to work with debt in all stages.
Q: How does your program work?
A: Our Program is designed to mediate debt. We effectively negotiate an interest-free settlement on credit card debt (usually no more than $0.60 on the dollar, which includes our fees) and set up a payment schedule that eliminates the entire debt in 20 – 36 months. There is no penalty for accelerating your program by adding funds faster than you expect to do at the outset. We also have a unique, innovative program that enables our clients to accelerate the process further.
Q: How does your Program differ from Credit Counseling?
A: With counseling programs, the principal remains intact, and the interest rates are lowered, thereby reducing your monthly payment. Since the principal remains intact, it usually takes 5 – 7 years to complete the program. Annual and late fees remain in force with counseling programs. Since Credit Counseling Programs are “non-profit,” they solicit donations from their clients.
We negotiate with your creditors to reduce then accept less than the current amount of the debt as payment in full. High-interest payments, annual fees, and late fees are effectively eliminated allowing you to complete the program in 1-3 years. Our program is a “for profit” program that charges fees rather than soliciting donations. In most cases, the settlement amount plus our fees amount to less than $0.50 on the dollar while remaining less than total repaid with Credit Counseling.
Comparing Debt Elimination Options
There are five basic options available to you when dealing with your unsecured debt:
- Your first option is to pay minimum monthly payments, which can amount to about three times what you owe and can take over 28 years.
- Your second option is to declare bankruptcy, which will stay with you for 7-10 years and has many other serious negative consequences.
- Your third option is credit counseling, which will take about 4 – 7 years. You’ll pay about 150 % of what you owe. More than half of all clients drop out of credit counseling before they complete their program.
- Your fourth option is debt consolidation: a lower monthly payment but a longer repayment period. It usually requires collateral and increases overall debt.
- Your fifth option, which is what our program offers, is a negotiated settlement where you pay back roughly half of your debts, with no interest, in 2 – 3 years or less. The cost includes our fees.
The monthly settlement payment is usually lower than your monthly minimum credit card payment, and the difference can be used to begin funding a savings/emergency account immediately.
Our program, we also have a unique and innovative strategy to help you even further accelerate your debt elimination and savings accumulation.
Q: Should I consider bankruptcy?
A: Bankruptcy may be considered as a last resort to protect your home. There are thousands of dollars in legal fees, and recent changes in the Bankruptcy Laws make it difficult to dismiss a debt if the court determines you can pay. Bankruptcy remains on your credit history for up to 10 years and may have to be reported on Employment and Securities Questionnaires when asked: “Have you EVER filed bankruptcy…”.
Q: How do I qualify for the program?
A: We offer a free consultation with our Senior Debt Consultants that includes a financial analysis to determine if you would benefit from the program. Our primary goal is to ensure that our program is a realistic solution to your particular situation. The last thing we want is to provide temporary relief – our goal is to eliminate your debt as cheaply and quickly as possible.
Q: How do I know if my case will be accepted?
A: You will be advised during your free consultation if we can or can not we can help you. If you are truly ready to get out of debt, facing financial hardship and currently have income, we will most likely assist you. However, we do have limitations and do not accept everyone into the program.
Q: What do I do if a creditor calls or sends statements?
A: You agree not to have any contact with your creditors, by phone, mail, or any other means during the duration of this program. Any contact from creditors is referred to our office.
Q: Can I continue to use my credit cards?
A: During the term of the program, you may not use any of your credit cards. However, you may use an employer-sponsored credit card for employee travel expenses. Additionally, we recommend using a debit card instead.
Q: How will your program affect my credit rating?
A: Depending upon the condition of your credit report at the time of enrollment, a Debt Settlement Plan may have a temporary adverse effect on your credit report and credit score. Our goal is to get you out of debt for the lowest cost, in the shortest period without declaring bankruptcy. Since you are not making the regular payments to your creditors, your credit rating will take a temporary dip during the program. Establishing creditworthiness is an integral part of financial wellness after the debt settlement program is complete.
Keep in mind; you will have ZERO credit card debt, positive cash flow and the ability to accumulate wealth at the end of this program; all of which will be positive factors in your future credit rating. Since our Program gets you debt-free in a much shorter time than the credit counselor’s program, your credit could be fully restored years ahead of the credit counselor’s schedule.
Q: Why do the creditors settle? How do I know this will work?
A: Our program is 100 % successful for clients who stick with the program.
The only time that we don’t settle is when a client drops out. The creditors always settle because it’s in their best interest. Here’s why:
Take a moment and pretend that you are the creditor – and let’s say that you have a client who is getting further and further behind on their payments. What might happen?
The worst-case scenario is that the client declares bankruptcy – and then what do you (the bank) get? Zero nothing except a tax write-off right?
Another more common occurrence is that the debt continues to be unpaid and the creditor decides to write it off. Then what does the bank get? They usually will sell the bad debt to a collection agency for pennies on the dollar. Not a great deal for the bank either, is it?
This is the main reason that credit counseling came into being. It’s a way for the creditor to keep earning income from your interest payments and keep you from bankruptcy or non-payment. The banks have a lot to gain if you pay interest year after year.
With our solution – a negotiated settlement – the creditor gets back a good share of the debt claimed with the least amount of hassle in the shortest amount of time. They get to deal with professionals and avoid their worst-case scenarios … bankruptcy and uncollected, charged-off accounts. They know that financial hardship is a reality for many people, so their goal is to maximize the amount of money they can recover in the shortest amount of time. (Many people have already paid off the amount they originally borrowed from the creditor and are only paying interest when they come into our program.)
Q: Fair Debt Collection Practice Acts cover what kinds of debts?
A: Fair Debt Collection Practices Acts (FDCPA) cover “consumer debts,” generally defined as a consumer’s personal, family and household debts. — Things like money you owe on a personal credit card account, auto loans, medical bills, and your mortgage. Debts for parking tickets, taxes, income tax, alimony payments and debts incurred to run a business are NOT consumer debts.
Q: What or who is a Debt Collector?
A: Debt collectors are anyone whose principal purpose is the collection of debts owed or due another. The term also includes any creditor who collects its debts due.
Q: Can a collector withdraw funds from my bank account without my approval?
A: You have certain rights and protections when money is taken out of your account without your permission or in an amount different than your permission. Such actions may violate The Fair Debt Collection Practices Act and also violate your rights under The Electronic Fund Transfer Act.
Q. Will I be totally debt free when I’m done?
A: Our program deals only with unsecured debts (credit cards, medical bills, unsecured personal loans). We do not help you with mortgages or auto loans. So technically you will still have debt. The Good News is after completing the program, the money that you are no longer paying towards your unsecured balances can now be used to not only save for your financial future but also pay down secured debts.
Q: Shouldn't I try to get a loan?
A: Borrowing more money at a high-interest rate will compound an existing debt problem. Additionally, many of those in debt find it difficult to qualify for loans and may need to secure the loan with an asset that can be easily seized by the bank. For other options, try our free consultation to see if Debt Reduction is right for you.
Q: Will I have to take out a different loan to pay off my current debts?
A: No. Our debt reduction program is not a loan. Some of our clients will use a “consolidation” loan in conjunction with Nationwide Debt Reduction Services debt negotiation program to expedite the process. However, most fund their settlements with a monthly payment into their dedicated settlement savings account over the program term. We do have a relationship with a lender, and for those clients who demonstrate a consistent pattern of saving their monthly draft on time; may be eligible for a loan to pay off their settlements.
Q: Should I enroll all of my credit cards in the program?
A: If you have one card with a low balance that you can quickly pay down to zero, then you should hold onto it for emergencies. However, the program will generally not work unless you enroll all of your high balance (greater than $500) high-interest rate credit cards. Otherwise, it makes it challenging for us to negotiate with your creditors if they can see that you are negotiating on their accounts but not others. Not to mention, your monthly payment may become unmanageable juggling those payments.
Q: Who controls the bank account where I am saving funds for creditors?
A: You. The dedicated savings account is set up in your name, the money in the account is your money, and you have complete control of the account. We recommend keeping it in a new account to keep funds separate from your existing bank accounts because, in our experience, this separation dramatically increases (by a factor of 2-3 times!) the probability that you will succeed in Nationwide Debt Reduction Services program. Nationwide Debt Reduction Services fees are deducted from this account, according to the Agreement that you sign with us. You have to authorize, the transactions and we don’t get paid, any funds upfront.
Q: Will I owe taxes on my forgiven debt?
A: Your creditors may or may not report it, but forgiven debt can be taxed at your normal rate. For example, if you owe a creditor $10,000 and settle it for $4,000, you have saved $6,000. If your tax rate is 25%, then you would owe $1,500 in taxes (which is still a savings of $4,500!). Dependent on your circumstances, you may be eligible to claim insolvency and would be able to avoid these taxes. The IRS, however, has a form (Form 982) available for certain hardship situations that may exempt you from this tax. For more information contact your local accountant or visit the IRS website.
Q: Will I receive phone calls from collectors?
A: Yes. There are federal and state laws to protect you from creditor harassment. However, the fact is that most of our clients experience some of these calls. Nationwide Debt Reduction Services goal is to have your creditors to contact us, not you. We will work with you minimize those calls. Also, we will provide tools to help you reduce those calls and ensure violators are appropriately handled.
Q: Do interest and late fees accrue on my accounts?
A: Yes. Anytime your accounts go past due; your creditors will continue to add interest and late fees to your balances. Typically, your balance will increase until a settlement is reached. However, the interest is going to accrue regardless of whether you make minimum payments or not. Nationwide Debt Reduction Services job is to negotiate substantial enough reductions to your balances, even after the interest and late fees have accrued.
Q: Will you answer my general debt questions even if I am not a client?
A: Absolutely, we welcome the opportunity. Often we answer questions about debts, credit reports, taxes, income and other topics on a daily basis. If we do not have the answer, we can refer you to someone who does. Remember, however, that we are specialists in debt reduction. For tax advice, you should contact an accountant. For legal advice, contact an attorney.
Q: How do I know I will be able to make it through your program?
A: During your free consultation, we carefully review your situation to determine if the program is right for you. You know your budget best and therefore must decide how much of a monthly payment you can afford to pay each month. Our program is a partnership. Your success in this debt reduction program depends on your ability to set aside the prescribed funds and to keep an open line of communication with us. If you can follow these guidelines, we know you will succeed in our debt reduction program.
Q: What is your interest rate?
A: We are not a loan company, so we do not charge interest.
Q: Do you begin negotiating with my creditors right away?
A: Except when dealing with certain difficult creditors, we generally contact your creditors to advise them that we possess Limited Power of Attorney and to request that future collection calls are directed to us. The actual negotiation is very limited until you have saved up enough in your dedicated savings account to make offers to your creditors. Typically, many creditors do not want to spend time negotiating an account unless they know there reasonable funds available.
Q: Will my debts be sent to a law firm? Will this result in a lawsuit?
A: Creditors can send debts to third-party collection agencies and law firms to collect a debt. It is within their rights. If this happens, we will continue to negotiate your account treat the debt as a priority creditor. Based on our experience, it is a small percentage of cases on which lawsuits are filed. When this does happen, usually the purpose of the lawsuit is to force an immediate settlement.
Q: Will my information be kept private?
Q: Could I negotiate on my own?
A: Yes, you can. Many people attempt DIY debt settlement. You can also do your taxes, repair your car, pull out your teeth. However, most people choose to get help for the best results. Why not leave these tasks to experienced people who earn their livelihood as experts in those lines of work? Our team of debt negotiation specialists have only one job – negotiating reductions on your unsecured debts, five days of the week. Our knowledge and experience put us in the best position to stand up to your creditors and fight for the best settlement possible. We also know the letter of the law, and that is critical in finalizing your settlements. Together, Nationwide Debt Reduction Services team of negotiation specialists are resolving millions of dollars of debt each month (and growing!).
Q: I would like to begin eliminating my debt right away, how do I get started?
A: Getting started is easy. Simply visit our contact page, and fill out our brief consultation request form. We will contact you to go over the details of our program.
Q: What if my questions are not listed here?
A: If you cannot find the answer to your question, contact us, and we would be elated to answer any additional questions you have.