Answer: At Financial Solutions we set out to help you with your current financial situation by getting a clear cut picture of your finances. Each customer's situation is unique so during your free consultation we customize your program to fit your financial goals.

• Our negotiators are required to be certified by the International Association of Professional Debt Arbitrator (IAPDA) which keeps them current with the laws pertaining to debt, credit and collection, to represent our client's best interests during sensitive negotiations. 

Question: DEBT SETTLEMENT SERVICES

Answer: Debt settlement is a process of negotiating your outstanding unsecured debt balances downward to an amount you can repay in a shorter amount of time. We’ll guide you through establishing a savings account that will build each and every month until enough money is saved to make a lump sum payment to your creditor. This process is also known as Debt Negotiation and it can be a good alternative to bankruptcy.

√ One Simple Monthly Payment Plan

√ Some Clients are Debt Free as quickly as 12-36 Months

√ We’ll Help You Take Control of Your Financial Future

Question: WHAT WE DO FOR YOU

Answer: Our goal is to help you take control of your financial situation. Debt settlement will allow you to avoid bankruptcy by helping you establish an affordable budget and build a savings account, while we negotiate your current balances downward so they can be paid off in a timely manner. 

We’ll work together to determine a monthly savings plan that fits your budget.

You are in complete control of your savings account and you will make the final payment to the creditors.

                  Your Payment Plan Is Flexible…

                             You Can Pay Ahead Of Schedule To Get Out Of Debt Sooner!

Question: HOW OUR PROGRAM WORKS

Answer: Our helpful consultants will explain the debt settlement process in detail. We'll address the positives and negatives of the program so you know exactly what to expect and are completely comfortable with a savings plan you helped design.

Step 1: Consultation

Step 2: Develop a Monthly Budget Together

Step 3: Sign Agreement

Step 4: Begin Savings Plan

Step 5: We'll Begin Handling all Negotiations with Your Creditors

Step 6: When a Settlement is Reached We'll Notify YOU

Step 7: You'll Send the Payment From Your Newly Established Savings Account to Creditor

Step 8: We'll Confirm Receipt and Proof of Payment from Creditor

Answer: Debt settlement gives you the chance to:

• Avoid Bankruptcy (Bankruptcy Affects your Credit for up to 10 years Also can be costly due to attorney fees and court costs.)

• Restore your Credit Rating after your debts are settled

• Save Money by Paying Back Less Than the Full Amount Owed to Creditors

• Make Only One Monthly Payment to Pay Off Debt

• Take Control of Your Financial Future

     Question: Who is eligible to participate in your program?

Answer: The vast majority of applicants are accepted into the program. Your consultant will review your financial picture and make a preliminary determination as to your eligibility. Your credit history will not be a factor in determining your eligibility.

Answer: We are able to deal with most unsecured debt. We do not handle secured debt, such as mortgages and car loans, purchase contracts, or government-backed student loans. Business debt will be considered on a case by-case basis. We do not negotiate IRS and tax debts.

Answer: Creditors have access to your entire financial picture through the credit bureaus. If some of your accounts are being paid, they will want to be paid also. By continuing to pay select creditors, you will make the negotiation process more difficult, and satisfactory settlements will be harder to attain.

Answer: Your creditors will call you regarding collection of payment on these accounts. We will give you helpful options on how you can deal with these calls. We suggest that you not discuss payment arrangements with your creditors; simply refer them to our creditor call line (provided in your enrollment packet), and we will gladly discuss a settlement schedule with them. Feel free to contact our customer service department if you need additional help.

Answer: Never, under any circumstances, should you discuss with your creditors the details of your program. You may refer them to our creditor call line or follow the suggestions provided in your enrollment packet. The more you talk to creditors, the harder it is for our negotiators to arrange satisfactory settlements.

Answer: Yes. The faster the balance in your account accumulates, the sooner we can make offers to your creditors and the sooner you will become debt-free. Larger monthly payments or lump sum payments will help accomplish that goal.

Answer: Funds will start to accumulate in your account with the first regular payment you make. Once your funds have accumulated enough we will begin the negotiation process. The order in which accounts are negotiated depends on your mixture of creditors. When there is a sufficient amount available, our negotiators will begin making offers on certain accounts based on our knowledge of which ones will need attention in order to avoid excess pressure from the banks. We may have to allow smaller accounts to wait, even though there is plenty of money to negotiate them, because we need to accumulate enough funds to settle a larger account with a more aggressive creditor.  The negotiation department will determine the best pace at which to submit settlement offers. Remember the longer an account ages without payments, the better chance there is of a lower percentage settlement. Time is on your side, so be patient. Your consultant estimated a time frame for your program, and it could take more or less than that for you to finish. In most cases, actual settlements begin 6-12 months after enrollment. However, it’s not unusual for most of a customer’s accounts to get settled in the last 8 months of a 30-month program, with substantial savings for the entire portfolio. Patience is the key to this program. You did not get into debt over night, and by being patient and following the program requirements, you will see dramatic results near the end of the program.

Answer: In some cases, creditors will not settle for less than the balance owed when dealing with the borrower. When they do, the settlement will probably not be as low as it would be with our negotiators. They know that most people will give in to their pressure and threats. As a third party, we can step in on your behalf and achieve better results. In addition, our program has two other advantages: 1. We help absorb the harassment that often comes with being late and 2. We put you on an affordable savings plan that gives you the discipline necessary to achieve your goals.

Answer: It is important to understand that any type of debt relief program will have a negative consequence on your credit score. One of the quickest ways to improve your credit score is to pay off your debt and that’s exactly what we help you to do! Your credit score will decline as you are going through the program. Once you have completed the program and we have settled your debt, you will now be in a position to begin restoring your credit if you choose to do so.

Answer: A debit card or stored value card can substitute for a credit card. We also suggest opening a secured credit card account and putting money that you save each month into the account, so you can use your secured card for your business expenses.

Answer: No. Since it will affect his or her credit, you must get his or her permission in writing. If that is not possible, you can go on the program without including that joint account. If you live in some states that have "community property" laws, both spouses must be enrolled in our program even if both are not on each of the accounts.

Answer: We suggest closing your current checking or savings account and opening a new one. The reason for this is if you put a stop payment on the draft, the creditor can just run the draft for a different amount. For instance, if you have agreed to have $20.00 taken out of your account each month, and you put a stop payment on the $20 draft, your creditor may just run the draft again for $19.99 or $21.00. It will then go through, since your stop payment was for $20.

Answer: You need to examine the paperwork on both loans to see whether the security is cross collateralized. A car loan with a credit union, for instance, is often tied to an unsecured loan at the same credit union, and if the unsecured loan is not paid, the car automatically becomes security for the unsecured loan.

Answer: All our negotiators are International Association of Professional Debt Arbitrators (IAPDA) Certified. This means that they are trained using the industry standard of training programs and are skilled debt arbitration & debt settlement professionals. Our negotiators are current with the laws pertaining to debt, credit and collection and represent their debtor client's best interests during sensitive debt negotiations with creditors and collectors.

Answer: No. The goal of debt settlement is to reduce the overall amount of the debt by negotiating agreed payoff amounts with your creditors. Debt consolidation requires you to take a loan to pay off your unsecured debt with secured debt.

• Debt Consolidation loans transfer the debt from one account to another and typically takes  unsecured debt(s) and changes it into secured debt (usually your home). If you do not have enough equity (typically 25 – 30% LTV), bad credit, or too much debt, it is not likely that you will be approved for a debt consolidation loan. 

• Statistics show that about 70% of people who obtain a debt consolidation loan find themselves in deeper debt than they were originally in within a two year period.  You cannot borrow your way out of debt.  Ask yourself why you would want to go from an unsecured loan to a secured loan  to be paid over a longer period of time? 

• The main problem with consolidation loans is that once you have paid off the credit cards you have a whole new source of spending power: $0 Balance credit cards. Many people lack the discipline to avoid incurring any more credit card debt, leaving them in a worse financial situation. You end up not only having to pay back the cards but also the consolidation loan.

• If you start missing payments on the consolidation loan, you stand to lose the asset (usually your home) that the loan is secured against.

• Yes, however, designing plans and settling debt is all  Financial Solutions Financial does.  You may be able to make your own plumbing repairs or install your own computer network, but most people don't have the time or expertise to deal with it.

• Creditors deal with thousands of people who are in financial difficulty every day and have a vast array of sophisticated (and some rather blunt) methods of intimidating you into financial arrangements you cannot keep.

• The settlement process is usually very emotional and stressful, especially when you are the one being attacked by collectors over the phone. Most people prefer to leave these tasks to experienced people who earn their livelihood doing that particular kind of work.

• We have a staff of debt negotiators whose only job is to negotiate the settlement of unsecured debt, every day, five days a week. By letting  Financial Solutions do what we do best, you will get better settlements.

•  Financial Solutions knows how to deal with creditors and has in-depth knowledge about how these institutions work. We can potentially save you thousands of dollars and free you from a considerable amount of stress.

Answer: No. Debt settlement does not work like consumer credit counseling in most respects. The goal of debt settlement is to reduce the overall amount of the debt, by negotiating payoff amounts with your creditors. Debt Settlement can save you thousands of dollars and years of repayment.  

Many Consumer Credit Counseling Companies  tout their non-profit status. Many consumers confuse "non-profit" with "no charge for services", or charity.  Non-profit Consumer Credit Counseling Companies may still make substantial amounts of money. The way Credit Counseling works is that you typically meet with a Credit Counselor who analyzes your unsecured debts, other obligations, and your monthly income. A credit counselor then formulates a monthly budget and presents a plan that includes lowering of some credit card interest rates and sometimes, the monthly payment.  The Credit Counseling Company then contacts all your unsecured debt Creditors and requests that the consumer be permitted to repay the debt at a lower interest rate. During the program a single monthly payment is sent to the Credit Counseling company and they in turn make payments directly to all your creditors for the next 48 – 72 months.

Consumer credit counselor charges what seems like a relatively small fee.  What you are not told is that the Credit Counseling companies act as a surrogate of the Credit Card Company. They make most of their money from "donations" from your Creditors based on the amount they "collect" from you while in the program. This is an arrangement very similar to the way collection agencies are paid by creditors. Since credit counseling companies rely on payments from the credit card companies, they do not truly represent the consumer. However, there are good credit counseling companies out there -- research them carefully to make sure their services make sense for you if you do not have a hardship that qualifies you for debt settlement and can afford to make payments under the credit counseling program.  

The downside to credit counseling is as follows:

• In a Credit Counseling program you pay the full amount of debt owed and sometimes the interest rate is lowered only nominally or not at all. 

• Credit counselors don't always make timely payments resulting in late fees and a derogatory credit history.

• Not all Creditors agree to reduce your interest.

• Payments are still high and it typically takes 5 or 6 years to pay off the debt.

• In order to pay off your debt in full, credit counseling monthly payments are usually equal to or greater than the minimum payments you were making on your credit cards.

• Most Credit Counseling programs have a high failure rate. Their own industry estimates approximate a 26% completion rate.

• Many of these companies are funded by your creditors – the very people to whom you owe money – and thus, they must demonstrate some loyalty to the creditors

• Despite claims otherwise, credit counseling may appear on your credit record.  This is viewed negatively by most lenders and may hinder your ability to refinance a home or get a loan.

Answer: The time to complete the debt settlement program varies from case to case and is primarily based upon how much money you will be able to set aside each month to eliminate the debt of your enrolled accounts. During your initial free consultation, the time to complete the debt settlement program for your individual case will be discussed with you by our debt specialist.  Financial Solutions’ average client plan is 18 - 36months. The amount of time it takes to clear your debts is largely dependent on your current financial situation. If your budget is extremely limited results may take longer. Every situation is different and we will be happy to discuss this during your free confidential phone consultation.

Answer:  Financial Solutions has assembled an impressive team of dedicated individuals who work with one common goal… to save you money. Remember,  Financial Solutions’ debt settlement program is set up to work with your best interest in mind.  We have created a win-win relationship, by implementing procedures to ensure the best results for our clients.    Although individual results will vary, accounts settled by  Financial Solutions average a reduction of 40% to 60%* of the balance owed on your total debt.

* Settlement estimates of up to 50% are examples of past performance of settled accounts. Individual results may vary and are dependant on successful completion of program and ability to save funds.

Answer: Yes, if  Financial Solutions is unable to settle an enrolled account, we will refund back to you or adjust your service fee by an amount equal to the service fee charged on that particular account balance at initial enrollment.  Note: You must have sufficient funds to settle the account in order to be eligible for the guarantee. Enrollment fees are nonrefundable.

Answer: A Debt Settlement Program will have a negative effect on your credit while in the program.  If your accounts are already delinquent it may not have much effect.  For consumers with unpaid delinquent accounts this makes debt settlement an excellent option over ignoring the delinquent past due account, considering the savings versus paying the past due account in full.  The question is, does debt settlement make sense for those who have current accounts, and a good credit rating.  Those with a high credit score must weigh the negative impact on credit ratings against the risk of bankruptcy and the potential of being out of debt for less than the full balance.  Note: even if your accounts are current your credit score may already be negatively impacted by your total debt and debt to available credit ratio; in this case negotiation of the accounts may still be a better alternative than making minimum monthly payments for the next 30 years and still having bad credit.

• While in a debt settlement program, you will receive late marks on your credit as you are not making regular payments to your creditors.  Your consumer credit score will be negatively affected during the delinquency period. This occurs for two reasons. First the account is late and is continually reported to credit bureau as the delinquency period extends (60, 90, 120 days). Secondly, the amount listed in the payment due column increases as past due payments stack up. If the accounts are current but the credit score is low due to high balances or a history of late payments, the negative effect on your credit may already be reflected in your credit score.

• Once your account balance and payment due is settled and reported as a zero balance, your debt to income ratio will be reduced as long as you have not since incurred more debt. Low debt to income ratios typically have a positive impact on accounts and credit, particularly over the long-term.  The history of the delinquency may remain on your credit report, but the account moves from the current derogatory reporting section of the credit report, to the closed account section. As months pass any derogatory history has less and less bearing on the credit score. Some lenders believe that after 12 months the accounts are given very little consideration. It appears that provided all other debts are paid in a timely manner (house, car, and other accounts kept current) the effects of the settlement process are temporary.  However, debt settlement should not be used as a method of credit repair.  Remember if you are considering chapter 7 or 13 bankruptcy it will stay on your report for 10 years.

Answer: Filing for bankruptcy has many negative implications, and is usually considered only as a last resort. Bankruptcy may seem to be the quickest solution to removing your outstanding debt but even bankruptcy attorneys will tell you it will remain on your credit for 10 years.

Both Chapter 7 and Chapter 13 will represent a major negative mark on your credit rating. In Chapter 7 bankruptcy it will stay on your report for 10 years and chapter 13 bankruptcy stays on your report during the time you are in the bankruptcy program plus a specified time calculated from the date you complete the program.

• Bankruptcy can cost up to $2,500 to file plus additional attorney’s fees. Additionally in Chapter 13 there is a 5% trustee fee for the administration of your chapter 13 bankruptcy.

• Chapter 13 bankruptcy the court decides what you can pay and what your budget is.

• Bankruptcy may affect your ability to get a job if you work in security or financial services or have duties involving financial information.

• Bankruptcy will likely result in higher interest rates on future loans and credit.

• Bankruptcy carries a negative stigma, mental stress, and other burdens.

• Chapter 7 bankruptcy is more difficult to qualify for since the change in laws in 2005.

• Filing for Chapter 7 bankruptcy does not mean you will qualify for Chapter 7.  If you fail to qualify, you will be referred to Chapter 13 bankruptcy.

• If you do qualify for Chapter 7 bankruptcy, however, your debts may be completely discharged.

• Chapter 13 bankruptcy usually requires the payback of all of your debt according to your ability to pay as determined by the bankruptcy court.

Besides being a devastating hit to your credit, bankruptcy can also potentially affect current and future employment opportunities for financial and security related jobs.  Additionally, Home lenders are now asking on loan applications, "Have you ever filed for bankruptcy?" Even if the bankruptcy has fallen off your credit report, answering "No" is considered a federal offense if you have ever filed for bankruptcy. Thus bankruptcy will follow you for the rest of your life. Bankruptcy is a permanent decision that is usually considered as the last resort to solving your debt matters. If you decide to file for bankruptcy, first seek the advice of a licensed attorney. If you have enough discretionary income and wish to work on resolving your debt over time, our Debt Settlement Program may be a better alternative.

Answer: Yes.  Financial Solutions maintains your confidentiality at all times. We only disclose information to those persons that you have authorized. All creditors that you have contracted us to settle with on your behalf will be contacted by us and advised that you have retained  Financial Solutions to represent you. All information is considered highly confidential and personal. 

Answer: Unsecured debt is any loan or debt that has no tangible assets or property attached to it. The most common types of unsecured debt are credit cards, department store cards, medical bills, utility bills, and personal loans. Should you fail to make timely payments, the lenders only recourse is to pursue legal action.

Secured debt is debt for which the creditor has collateral in the form of a security interest in personal and/or real property. Should you fail to make timely payments on secured debt, the creditor is entitled to repossess the property and sell it. Please keep in mind that you may still be liable for any deficient balance remaining after the sale of the property. When dealing with secured debt, it is important to obtain advice from a licensed attorney in order to protect your interests.

Answer: Most likely, yes. Most original creditors are cooperative. Calls may reduce after the original creditor receives a hardship letter from you. Eventually you may still have to put up with their calls for another 30 to 150 days, because it takes time for original creditors to update their records and this varies by creditor. It is important that you review the section on how to handle creditor calls in the program kit you receive as a new client to minimize creditor harassment. You will also need to keep a creditor log of every phone call or letter that you receive from a creditor and report it to us. Consumers have rights against abusive collection tactics.

Answer: Most creditors will continue to charge fees and interest until the account is written off (typically 120 – 210 days) although it may be longer. 

Answer: No - creditors have the right to use legal means to collect a debt. Some creditors are more likely to file suit than others.

In our experience, a small minority of consumers are involved in lawsuits. However, it is a common tactic of third-party creditors or collection agencies to threaten you with a lawsuit (which is illegal if they do not intend to sue). Third-party creditors or collection agencies sue less frequently than original creditors. While we cannot guarantee that legal action will not be taken, we are confident that our experience in dealing with creditors can reduce the possibility of this happening.

Despite any legal action that may or may not be taken, your account can be settled before, during or after the suit. Just because an account goes to legal action does not mean that we cannot settle it. The threat of legal action can be the scariest of all. IT CAN BE HANDLED. We sometimes recommend that our clients seek competent legal counsel in certain situations.

Note: We cannot provide you with legal advice. However, we work with your creditors in an attempt to make a settlement even when legal action is pending.

Answer: Creditors are required 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. Therefore, unless you have a positive net worth, then you ordinarily will not be obligated to pay taxes on the forgiven amounts.   Additionally, if you do not qualify as insolvent non principal amounts such as fees accumulated on the account may be deducted from the amount reported. Refer to: www.IRS.gov Publication 908

Note: You should consult a tax advisor for advice specific to your situation. This should not be considered tax advice.

Answer: While  Financial Solutions may recommend a bank that helps protect your money, your personal savings account is a bank account that you control. This account remains your property and under your control.  Financial Solutions will contact you monthly to ensure that you are depositing the minimum program savings amount as set out in your settlement program. When you have accumulated enough funds in your account our debt negotiators will begin the negotiations process with your creditors.

Answer: Our fees are very competitive, are based on a percentage of your overall debt, and consist of an enrollment fee and a service fee. We earn our enrollment fee as follows: when we perform a budget review, analysis of your accounts, and file setup; when we have prepared initial correspondence for the client to send to the contracted creditors directly, and when we send the program kit to the clients. The service fee is earned as we engage creditors for settlement, handle creditor calls and communication, negotiate a settlement of your contracted accounts and administer the settlement and funding arrangements. If  Financial Solutions is unable to settle an enrolled account, we will refund back to you, an amount equal to the service fee collected on that particular account based on the balance at initial enrollment.  

Answer:

• Someone who has some type of hardship such as (illness, disability, divorce, job loss, or a reduction in pay) and is having difficulty making payments on their credit card debt.

• Someone who has past due credit card debt in excess of $10,000, with high interest rates and unsustainable payments such that the individual is considering filing bankruptcy.

• Someone with a debt problem that he or she cannot resolve.

• Someone who is having trouble staying current and is delinquent on their accounts or is receiving collection calls or is close to having suit for a judgment filed against them.

• Someone considering bankruptcy, but would like to avoid it.

• Someone who's minimum payments become too high?

• Someone living paycheck to paycheck?

• Someone who's credit cards are near or already maxed out?

• Someone who's considered filing Bankruptcy?

• Someone who's monthly bills exceed what you earn?

• Someone who's debt is causing conflicts with your loved ones?

• Someone who's getting collection letters and phone calls?

• Someone who's ready to take control of your financial future?

   

Answer: Many people assume that making payments on time means they have good credit and being late with payments accounts for 30% of your credit score.  Your make up of debt plays an almost equally important role.  We recommend you get a copy of your credit report before you commit to any program. 

Problems with credit card accounts are the most common cause of negative reporting on your credit report.  Some examples:

• Making minimum monthly payments for several months will decrease your credit score.

• Credit cards charged to their credit limit has a major impact on your credit score.

• Too many open accounts will decrease the credit score.  Note: If you close your open but zero balance accounts this may also negatively impact your credit score if it causes your Total Debt to Total Available Credit to be greater than 50%.

• Too many recently opened accounts cause a decrease in credit score.

Answer:  Financial Solutions DOES NOT disburse funds to your creditors on a month by month basis. The purpose of our debt settlement program is to create a savings plan (Escrow Account) so our negotiators can negotiate settlements on the balances you owe. Those in a debt settlement program, are financially unable to make regular payments to creditors and instead set aside money in an Escrow Account to pay a settlement once negotiated. If you can afford to keep paying off your debts on your own, you should do so. Under the debt settlement program, once we reach a negotiated settlement offer, we will then make the payment directly to your creditors from your Escrow Account. Once the payment has been made the account will now be considered settled in full.