FAQ - Debt Settlement Los Angeles, Debt Consolidation San Francisco, Credit Card Consolidation Sacramento, Bankruptcy, Consumer Credit Counseling Services Los Angeles, Credit Card Debt San Diego, Debt Relief, Debt Help

Q: Why should I choose Debt Settlement Professionals?
A: Debt Settlement Professionals is an industry-leading debt settlement services provider. Our Debt Arbitrators possess a solid understanding of the laws governing the Debt and Credit Industry and fully understand your current financial situation. We maintain relationships with numerous consumer-lending institutions and can arbitrate settlements with Creditors and Collectors on your behalf. As Certified Debt Arbitrators, we facilitate a win/win resolution to your debt and credit problems. Debt Settlement Professionals is committed to helping you establish and maintain your financial future.

Q: What is bankruptcy?
A: Personal bankruptcy is a legal way to give people with overwhelming debt a fresh financial start. However, it is important to realize that certain forms of debt, such as student loans, are not forgiven through the bankruptcy process. Bankruptcy can have a devastating impact to your credit report and credit score. Bankruptcy will often remain on your credit report for as long as 10 years. During this time it can be next to impossible to obtain loans or any type of credit. If you are able to find a lender that is willing to do business with you, you will pay the highest possible interest rates allowed by law. Quite often, lawyers are quick to suggest bankruptcy, but they don't always explain how damaging bankruptcy can be. Why would a lawyer do this? The answer is simple; if you don’t file for bankruptcy, they don't get paid. The best thing that you can do is obtain independent information if you are considering bankruptcy. This way you become informed in an unbiased manner.

Q: What's the difference between debt settlement and debt consolidation?
A: The Debt Settlement process involves negotiating with your creditors to settle your debt for amounts significantly less than you currently owe; typically, we can settle your debts by up to 60% of the balance owed at the time of settlement. This will save you sizable amounts of money on debt principal and interest. It also provides you with the opportunity to pay-off your debts faster.
Debt Consolidation can be accomplished two ways. The first method is through a debt consolidation loan, and second through a debt consolidation service. A debt consolidation loan provides funds to consolidate all of your debts into one single monthly payment and is traditionally secured in the form of home equity. A debt consolidation loan reduces the number of payments you have going out monthly and can simplify your debt problem. However, a debt consolidation loan does not mean you are debt-free; the debts have just been transferred to a new creditor. Hopefully, this debt consolidation loan will provide you with a lowered APR and allow you to pay off the new loan quicker. This may sound like a good solution to avoid bankruptcy and get out of debt; however, it can also damage your credit and cause you to pay back far more than if you had selected a debt settlement or debt arbitration program.
Debt consolidation services claim to provide assistance and guidance for people with debt and credit problems. They claim that they will work with your creditors to provide you lower interest rates and payments. However, these debt consolidation services spend millions of dollars each and every year on advertising and exist for one purpose only; to ensure that the credit card issuers get paid back every cent that is owed. They call themselves non-profit debt consolidation companies, but this can be misleading. The bottom line is that the credit card companies fund these “non-profit” debt consolidation companies that they are supposedly “negotiating” with to help you

Q: Is it possible to settle my own debt?
A: While it is difficult to negotiate debt on your own behalf, it is possible. However, it is important to realize that we maintain relationships with numerous consumer-lending institutions and negotiate with creditors and collectors on a daily basis. Our Debt Arbitrators have knowledge of both the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA). This knowledge helps ensure that your rights are protected under these laws.
Creditors, on a daily basis, deal with thousands of people who are unable to pay their bills. As a result, they have been forced to develop direct and sophisticated methods to get you to repay your debts. Dealing directly with your creditors can be difficult. Imagine building your own computer. Can you do it yourself? Sure you can, but if you don't have the necessary knowledge or the right tools it, it can be an extremely complex task. Let the experts at Debt Settlement Professionals do what we do best; negotiate your debt without the stress.

Q: How long does the settlement process take?
A: As with any program of this nature, the time to completion will depend on several factors. During your initial, no obligation consultation, the time necessary to complete our program will be discussed. The average client of Debt Settlement Professionals can be debt free in as little as 12 - 36 months. The amount of time it takes to resolve your debts is largely dependent on your current financial circumstances. Every situation is different. We will be happy to discuss yours with you during your free consultation.

Q: Will debt settlement affect my credit?
A: The Debt Settlement Program may have a negative effect on your credit profile. However, once negotiated and settled, your creditors will report the accounts as "settled" or "paid in full".

Q: How does the program work?
A: First: The first step in our program is to obtain a free consultation from one of our professional Debt Consultant. This can be done by filling out a request form or calling us at 1-866-486-4086. Our Debt Consultant will assess your financial situation and determine whether you are a candidate for our debt resolution program.
Second: Upon acceptance, your Debt Consultant will help collect and gather the information and documentation that is needed for us to assist you. After a complete financial analysis, your Debt Consultant will help you establish an affordable monthly payment, which, after enrollment fees, will be placed into a trust account. This account will be used for future debt settlement purposes.
Third: You will be assigned an IAPDA (International Association of Professional Arbitrators) Certified Debt Arbitrator who will engage your creditors and help put an end to the your debt problems. The main purpose of the program is to settle your debts for a lesser amount than you owe. Our negotiators can typically reduce your debts up to 60%!
Fourth: Once we negotiate an acceptable, written, settlement offer, we will arrange for you to send funds from your personal savings account to pay off that debt. This process will be repeated for each creditor until all of your debts have been repaid. As each of your creditors receives payment, you will receive written confirmation documenting that your debt has been paid in full.
Fifth: Upon successful completion of our program, we will provide you with proven ways to maintain a debt-free lifestyle. This will help you regain control of your finances and increase your financially stability. Additionally, we refer you to a credit restoration company that can help remove inaccurate, erroneous, and unverifiable information on your credit report. This will help in regaining a positive credit rating.

Q: Will creditors continue to contact me after joining the program?
A: Once enrolled in the program, our team of professional debt arbitrators will contact, at its discretion, your creditors and instruct them to direct any and all communication to us. However, you must be aware of the fact that there is a difference between original creditors and collection agencies. When dealing with collection agencies Debt Settlement Professionals will instruct third-party debt collectors to direct any and all communication involving your accounts to our corporate offices only. Original creditors on the other hand can continue to call if they so choose. However, many original creditors will abide by a request not to call and respect your privacy. Additionally, as a Debt Settlement Professionals client, you will be taught how to handle calls from creditors and debt collectors as well as to limit the number of calls that you receive in the first place. Debts Settlement Professionals proven three-step process helps dramatically reduce the number of collection calls that you will receive. Often, this is a huge relief to clients as these types of calls can be quite stressful.

Q: Why shouldn't I just declare bankruptcy?
A: Maybe you should declare bankruptcy. That's is a choice you must make. However, for many people bankruptcy is considered a drastic last measure. While bankruptcy may seem to be the most expedient method for removing your unsecured debt, it is not, by any means, the best answer. A bankruptcy will remain on your credit record for 7-10 years and seriously affect your ability to rebuild your credit. Even after a bankruptcy has been removed from your record, you are still required to disclose it on forms and applications, even applications for employment. If you fail to answer this question truthfully it can be considered a crime. Additionally, certain types of bankruptcy can require a court-appointed trustee to control and oversee all aspects of your personal estate. Bankruptcy can have an adverse affect on your credit rating and lifestyle long after the legal matters are over. This is not a decision to be taken lightly. Bankruptcy is an option that should only be explored as an absolute last resort to solving your financial problems.

Q: Is debt settlement right for me?
A: If you've experienced a true financial hardship and now find yourself with more debt than you can manage, we may be able to help you achieve debt relief...quietly and discreetly, and without filing bankruptcy. Debt Settlement Professionals can help negotiate the debt you owe and possibly reduce your outstanding balances by up to 60%. If you can demonstrate a legitimate financial hardship, and are deep in debt with no way out, it's time to take action! Let Debt Settlement Professionals help you avoid bankruptcy, achieve debt relief, and regain control of your finances.

Q: What if I am sued and it results in a Judgment?
A: It is possible for creditors and third-party collection agencies to use legal means as a way to collect debts. The likelihood of being sued or having your wages garnished depends largely on the creditor that is owed money. It has been our experience that certain creditors are more prone to legal action than others. Traditionally, creditors seek legal action only if there is a considerable lack of contact with regard to the account or if they feel that a consumer could simply be trying to escape their financial obligations. If you currently earn a respectable salary, own a home that has a sizable amount of equity, or can most likely afford to repay your current debts without the use of credit counseling, debt settlement, or bankruptcy, then there is a possibility that a judgment may be filed against you if begin to miss your monthly payments.
While legal action is not common with original creditors, it can happen. However, third-party creditors and collection agencies often threaten people with lawsuits to force them to repay their debts. Traditionally, third-party creditors and collection agencies do not sue if the probability of debt settlement is high. Additionally, for legal action to proceed, third-party creditors and collection agencies must retain the services of an attorney that is licensed if the state in which you live.
Even if legal action is pursued, a wage garnishment can take a considerable amount of time and depends upon your current employment. Many states have laws that stop creditors from being able to use wage garnishment as a means to collect debts. Additionally, if you are a homeowner, it can be very challenging for a creditor to use the equity in your home as a means to collect debts. Many states provide you security in the form of a homestead act. In most cases, it makes more financial sense for creditors to settle a debt than to use the legal system.
Debt Settlement Professionals cannot guarantee that legal action will not be taken against you, but we are confident that we can reduce the risk of it happening. However, if a creditor does not wish to settle out-of-court, it would be a very good idea for you to seek the legal advice of an attorney on how to proceed.

Q: Will I owe money to the IRS for my reduced settlement?
A: Once you have settled a debt, creditors are required to report any forgiven amount that exceeds $600 to the Internal Revenue Service (IRS). Additionally, you are supposed to report the same as income on your federal income tax return. Creditors that have forgiven debts at or above the required amount will send you and the IRS a Form 1099-C at the end of the tax year. The 1099-C will be filed along with your other tax related documentation. However, the IRS will allow you to write off any income from canceled debts up to the amount by which you were insolvent at the time of settlement. Consequently, if you did not have a positive net worth at the time of your settlement, you most likely will not be required to pay taxes on the forgiven amount. If you do not meet insolvent requirements of the IRS, amounts other than the principal balance may be deducted from the amount reported in your annual return. For additional information, please refer to: www.irs.gov under publication 908
Insolvent: You are considered insolvent when you have liabilities in excess of a reasonable market value of your current assets.
Note: This should not be considered tax advice. Debt Settlement Professionals does not provide tax, legal or financial advice. If you need any type of legal or tax related advice, you must contact a licensed attorney or a qualified accountant.

Q: What is the difference between unsecured and secured debt?
A: A secured debt is a debt in which the creditor maintains a security interest in an item or piece of personal property such as a house or an automobile. With secured debts, if you fall behind on payments, the lender can repossess the property that originally secured the debt. An additional drawback to secured debt is the fact that you may remain liable for the deficiency balance owing on the debt after your property has been repossessed and sold. However, the laws regarding home mortgages vary from state to state. This means that a lender's debt recovery rights will depend on the terms of your mortgage and whether any other lenders also have an interest in the property.
Unsecured debt is debt in which you borrow from a creditor to obtain goods or services on credit in exchange for your promise to repay the debt. The primary difference between secured and unsecured debt is that unsecured debt is not collateralized by personal property. Unsecured debt is commonly given in the form of credit card debt, commercial debt, medical debt, and personal loans. If you fall behind on an unsecured debt, lenders can take legal action against you, but more commonly will try to work out a reasonable debt settlement. It is possible for a secured debt to become an unsecured debt when the property that is securing the loan has already been repossessed and sold by the creditor. Traditionally, if the sale of the property does not cover the full amount of the debt, it will result in a deficiency balance, which is still the responsibility of the consumer. This deficiency balance is now considered an unsecured debt because no property is securing it. In many cases, this balance can be successfully resolved through a debt settlement program.

Q. When does Debt Settlement Professionals begin settling my debt?
A. Once you have fully retained our services, your creditors will be notified immediately and Debt Settlement Professionals will begin the settlement process. However, we can only settle a debt once the full funds are available in your settlement account.

Q. If I miss a monthly payment to Debt Settlement Professionals, will I be dropped from your program?
A. No. Simply call our customer service department and we will arrange payment over the phone. 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 us at 888-853-6733, Monday thru Friday from 8am - 6pm PST to speak with a representative.

Q. Are my creditors going to continue to call me?
A. We notify your creditors of our representation and inform them that they should contact us with respect to settling your debt. Most creditor calls will stop within 30 to 60 days. If you continue to get calls, call our customer service department and they will again contact the creditor informing them of our representation. In all cases, you should keep a log of all calls you get from creditors with respect to the debt you put into our program.

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 Debt Settlement Professionals and report this correspondence. We will handle all of your creditors and collectors on your behalf.

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.

Q. Do I have to include all of my creditors into the program for settlement?
A. There are very few circumstances where a creditor will refuse to settle. As with any negotiation, there are offers and counter-offers and given time, and in the majority of cases a settlement is reached. Creditors realize that settlement is in their best interest because if a debtor files for bankruptcy, most times the creditor will be left with nothing.

Q. Will Debt Settlement Professionals stop late fees and interest from accruing on my accounts?
A. Debt Settlement Professionals 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.