1. What is debt settlement?

Debt settlement is when a creditor agrees to accept less than what is owed to satisfy debt. It usually involves negotiations between you and your creditors. These negotiations are often conducted on behalf of the consumer by a professional debt negotiator to settle unsecured debt for less than the full balance.
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2. Do I qualify for debt settlement?

Debt settlement programs help those who are having difficulties paying debts or have limited or no ability to pay their debt bills in the future and could potentially face bankruptcy. Debt settlement is a proactive approach for people facing hardships that stem from reduced income, job loss, medical expenses, divorce or many other unforeseen factors.

Many debt settlement companies also require clients to have a debt amount of at least $10,000 of unsecured debt – debt that is not backed up by some type of collateral: house, car, insurance, etc. because these types of debts can be repossessed or canceled at any time.
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3. How do I apply?

Simply complete the form or call our toll free number to speak with a Senior Debt Settlment Specialist. A Specialist will review your information and discuss your situation with you. After that, they will discuss all your available options for handling the debt and determine if you are qualified for our program. All of this is provided FREE to you with no obligation, on your part, to pursue debt settlement.
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4. How do you settle my debts?

A debt settlement company is an amazing option if you cannot afford to go with a Consumer Credit Counseling Agency. Debt settlement companies negotiate on your behalf. Typically, the company customizes a savings plan, based on your financial situation, and helps you set aside funds to pay off the settlement. Normally, money is deposited into a savings account each month. Once enough money builds up in the account, the debt settlement company uses those funds to obtain a settlement with creditors for less than the outstanding balance.

Due to a Senior Debt Settlement Specialist's lack of emotional involvement, you can be confident that the negotiations are objective, effective and in your best interest.
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5. How quickly can I get out of debt?

Depending on your situation, a professional debt settlement program usually takes about 36 months or less to settle all enrolled debt accounts. The time to complete the program is also dependent on debt owed and the status of the debt accounts.

Other factors that impact the time needed to get out debt are the necessity of allowing accounts to age and to accrue enough set-aside funds so that a settlement offer can be made to the creditors.
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6. Why would creditors agree to accept less than the amount owed?

Creditors prefer to collect the full amount owed, but they understand that if bankruptcy is filed, they may get nothing. Because of the possibility of taking a total loss, creditors are usually open to debt settlement, especially once they recognize the financial hardships you may face. In the end, creditors would rather get something than run the risk of getting nothing at all.
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7. How does debt settlement differ from credit counseling?

Consumer Credit Counseling Agencies (CCC) are organizations that can help you budget and organize finances so that debt repayment can be made quickly. CCCs create repayment plans and work to lower interest rates; however some may be funded by the very same creditors you are trying to pay off. Therefore, you may end up with a plan geared towards the creditor’s interest and not your own.

Debt settlement companies are funded through the fees it collects from clients, so they have the consumer’s best interest in mind and not the creditors. Debt settlement companies negotiate settlements with creditors and once that settlement is reached, you never have to make another payment!
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8. Should I consider bankruptcy?

Sometimes, it may be in your best interest to consider bankruptcy, although you should investigate all other venues of debt relief before you do consider bankruptcy. Bankruptcy can eliminate all of your debt, but the consequences of bankruptcy may outweigh its benefits. The bankruptcy process is often troublesome, invasive and expensive. It can also leave you with a feeling of embarrassment due to the unfortunate social stigma associated with bankruptcy. Many people who filed for bankruptcy in the past say they would never consider it again.
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9. What about debt consolidation?

Debt consolidation combines all of your unsecured debts into one large debt. The most common debt consolidation loan is a home equity loan. Home equity is the fair market value of your home minus what you still owe on your house. Consumers typically take out a home equity loan to help pay off other credit card bills, but this loan just moves the debt from unsecured accounts to a loan that is backed by their house.

While this process may sound convenient, the pitfalls of debt consolidation are numerous. For example, if you take out a home equity loan and cannot afford to repay your lender, you could face foreclosure and eventually lose your home. Many consumers who chose a debt consolidation loan end up charging new debt on their credit card accounts, which increases their overall debt burden and chances for encountering financial difficulties. Debt consolidation may be an appropriate debt relief solution for some, but it may be in your best interest to investigate other debt relief options first.
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10. Can I still use my credit cards?

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.
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11. What are the tax consequences?

Banks are supposed to report canceled debts exceeding $600 to the IRS and you are supposed to report the same as income on your annual tax return. However, the IRS permits you to write off any “income” from canceled debts up to the amount by which you were “insolvent” at the time. So unless you have a positive net worth, which is highly unlikely if you’re deep in debt, then you ordinarily won’t have to pay taxes on the forgiven amounts. Consulting your own tax advisor for advice specific to your situation is highly recommended.
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12. How much money can debt settlement save me?

Debt settlement savings may depend on the creditor and the type of debt. Since each person is unique and can have varying results, settling debt for about 50% of the entire balance is usually not uncommon and most companies negotiate for percentages that range between 20% – 60%.
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13. Can I negotiate a settlement on my own?

You can certainly attempt to negotiate a debt settlement on your own. But, if you do, make sure you do it right. Our trained Senior Debt Settlement Specialists have years of experience negotiating and securing settlements with creditors and debt collectors.

If you do choose to settle on your own, or if you do not qualify for a professional debt settlement program, consider purchasing the Do-It-Yourself Debt Settlement Kit from the Financial Awareness Network (NFAN). The kit will give you information to negotiate your own settlements with creditors and debt collectors. To successfully settle debt on your own (among other important things) you need to understand the collections process, differences between various creditors and the right time to begin negotiations. You must also understand how a debt settlement agreement is structured to make sure the agreement clearly spells out the negotiated settlement.

Debt settlement can get complicated. If you're not sure you have the knowledge, organization and self discipline, it is best to leave it to professionals. Even if you have the time to learn how to save up, negotiate and settle your debts, some emotional attachment may linger, which could interfere with your objectivity. Professional debt negotiators maintain an objective position with the debt they settle, which means they are less likely to be intimidated by debt collectors.
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	UNSECURED DEBT Acceptable Debt Includes:* Credit Cards (Visa, MC, AmEx, Discover) Retail Store Cards (Wal-Mart, Sears, JC Penny, Macy's, Best Buy, etc.) Medical Expenses Phone Bills It Does NOT Include: Mortgage Payments Automobile Payments Insurance Bills Federal Taxes Student Loans
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Quick Terms

Credit Card Debt: The amount gathered and owed to a lending organization for funds borrowed.

Debt Settlement: An approach in debt reduction in which the debtor and the creditor agree on a reduced balance that will be regarded as payment in full.

Debt Relief: A term most commonly used to describe the partial or total forgiveness of debt. It is most typically associated with debt reduction and debt settlement or both.

To learn more about Terms used by Debt Specialists, click here.

Settlement Solutions

Debt settlement is a logical and straightforward approach to eliminating credit card debt, outstanding medical expenses and other unsecured debts and therefore removes the mystery of debt relief. It is the intention of the Senior Debt Settlement Specialists to educate you about this debt relief option and let you make an informed decision about whether it’s the best debt relief solution for you. And, all of this is FREE to you with NO OBLIGATION to take the offer.

To learn more about Debt Settlement Solutions, click here.