Q.
Is your Debt Settlement Program the
same as debt consolidation?
No. With our Debt Settlement Program we negotiate
on your behalf to actually reduce the amount you pay to your creditors.
Debt consolidation requires you to obtain a new loan in order
to pay off your existing debt. If you have too much debt and/or
bad credit, it is highly unlikely that you would be approved for
a consolidation loan.
Q. Who
is eligible to participate in our program?
An American Debt Negotiation Senior Debt Consultant
will review your financial picture and make a preliminary determination
as to your eligibility. Poor credit history will not keep you
off our program. On the other hand, many people with perfect credit
history are often under tremendous financial strain, and could
be eligible. Final underwriting decisions are made by the corporate
office within two working days of receiving your returned enrollment
packet, and at that stage no one will be disqualified without
first being contacted by the underwriter for more information
on their financial situation.
Q. How
will the Debt Settlement Program affect my credit?
While clients will experience an adverse affect
on their credit if their debts are current with no history of
late payments, our Debt Settlement Program should ultimately improve
your debt to income ratio and may improve that specific portion
of their credit score. Since your outstanding debt is resolved
by way of settlement, future creditors will see that you have
made a concerted effort to resolve your debt instead of filing
bankruptcy.
Q. What
can I expect from your Debt Settlement Program?
You may experience a substantial reduction
in the amount of debt you owe to unsecured creditors. While individual
results may vary, we may settle your outstanding debt sometimes
for as little as 25%-50% of the balance owed.
Q. Which
of my debts can I include in your program?
We are able to deal with all unsecured debt.
We do not handle secured debt such as mortgages and car loans,
purchase contracts, nor can we get involved in government-backed
student loans. Business debt will be considered on a case-by-case
basis. Although UFS does not negotiate IRS and tax debts, we do
have an option available if you are in this situation.
Q. What
is Secured Debt?
A Secured Debt is a loan where the creditor
retains a security interest in an item of real or personal property
such as a house or an automobile. If you fall behind on payments
on this type of debt, the lender has the ability to repossess
the property in order to mitigate their damages. It is important
to remember that you could remain liable for any deficiency balance
owing after the property has been repossessed and sold. Certain
exceptions may apply and will depend on the exact nature of the
security interest. The laws regarding home mortgages vary from
state to state and the lenders rights generally depend on the
terms of the mortgage and whether any other lenders have an interest
in the Real Property. In these situations it is important to seek
competent legal advice to protect your interests.
Q. What
is an Unsecured Debt?
An Unsecured Debt generally arises out of a
contract you enter into with a creditor which enables you to obtain
goods or services on credit in exchange for your promise to pay
that creditor back. The most common types of unsecured debt are:
credit cards and personal loans.
Q. When
does a Secured Debt become an Unsecured Debt?
A secured debt may become an unsecured debt
in situations where the property securing the loan has already
been repossessed and sold by the creditor. If the sale of the
property does not cover the contractual obligation, a deficiency
balance is owed by the consumer. This deficiency balance then
becomes an unsecured debt. Certain exceptions may apply and will
depend on the exact nature of the security interest.
Q. Can
I choose to leave some of my unsecured debt out of the program?
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.
Q. Do
the debt settlement procedures work with every creditor?
No program works 100% for everyone, every time
and of course no firm can guarantee all results in advance. We
are proud to say that we have an extremely high success rate.
In fact, we have previously settled millions of dollars of consumer
and commercial debt.
Q. Will
all of my debt be eliminated after I've finished your Debt Settlement
Program?
If you follow all of our procedures, you may
be free of all contracted unsecured debt at the conclusion of
our services. Of course, you will remain obligated on certain
secured debts (i.e., Mortgages, auto loans). Individual results
may vary
Q. Does
American Debt Negotiation keep my information confidential?
ADN is committed to maintaining complete confidentiality.
Your information will not be given out to anyone except those
persons authorized by you to receive information on your behalf.
Of course, the creditors will be advised by us that you have contracted
our firm to assist you.
Q. What
are the fees to begin the program and how are you paid?
The service fee for each case varies and is
based upon the complexity of your financial situation. We will
of course discuss our fees prior to accepting you as a client.
When you consider the money you will save with the Debt Settlement
Program, it is normally very clear that this program is a sensible
solution to your situation. Ask your certified counselor for a
payment worksheet if you do not already have one.
Q. Do
I have to include all of my debts or can I select which one's
I want you to resolve?
In the Debt Settlement Program you can select
which accounts you would like us to resolve. It may be recommended
that you include all or most of your unsecured debt and this will
be discussed during your free initial consultation.
Q. What
part do I play in the ongoing process?
Your only part is to make your monthly payments
and to communicate with us if you receive letters or harassment
from your creditors. You should never agree to send money to your
creditors, and should avoid talking to them. That is our job now.
Q. What
do I do when creditors call me about late payments?
It is important that you use the Client Instruction
Sheet we will provide in your enrollment. We will give you options
on how you should deal with any calls. We will work with you to
stop harassment by collectors. When you pass information regarding
harassment on to us by fax, email, or mail, we will take the necessary
steps to enforce your rights. If collection agents call you at
work, they must stop calling once you have informed them that
they cannot call you there. If they do not, we need to be informed
as to who is in violation of your rights, and we will take further
steps to remedy this for you.
Q. Should
I tell my creditors that I am putting money away for negotiation?
Never, under any circumstances, should you discuss
with your creditors the details of your program. You should merely
follow the script and make notes
Q. What
if an aggressive creditor makes demands or threats?
Immediately contact our Customer Service Department.
The Customer Service Representative will direct your call to the
appropriate department if necessary.
Q. What
if one or more of my creditors currently takes their payment out
of my checking or savings account by automatic draft?
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.
Q. When
does the negotiation process start?
Once your enrollment fee has been paid, funds
will start to accumulate in your bank account. The order in which
accounts are negotiated depends on your mixture of creditors.
When there is a sufficient amount available, American Debt Negotiation
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 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
now, so be patient.
Q. Can
I put more than my scheduled payment into my account?
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 would accomplish that goal.
Q. Will
I be notified of pending settlements?
Because of the way the creditors work, settlements
often have to be paid on the same day that the arrangements are
made. We have your written permission authorizing us to make settlements
with your creditors, and payments will be made that we feel are
within the parameters of our program. You will be advised of settlements
after they have been made.
Q. If
I had a co-applicant on a card, can I go on the program without
their permission?
No. Since it will affect their credit, you should
get their permission in writing. If that is not possible, you
can go on the program without that joint account being included.
Q. If
I have a secured loan and an unsecured loan with the same bank
or credit union, is it okay to put the unsecured loan on the program?
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.
Q. How
do I contact ADN if I have questions about my account?
You can e-mail or phone our Customer Service
Department to have specific questions answered. Our contact information
is available online and will also be included in the enrollment
packet you receive after speaking to your ADN debt specialist.
Q. Will
I receive calls from my creditors throughout the Debt Settlement
Process?
Although ADN will send correspondence to your
creditors requesting that they cease all communication with you,
you may receive some calls through the process. If this occurs,
simply report the name and phone number of the creditor to our
office and our Creditor Intervention Department will contact them
directly and attempt to redirect their calls to our office.
Q. Will
I continue to get collection letters from my creditors?
Yes. There is nothing to prevent the creditors
from sending letters to you. You do not need to forward each statement
to our office, but be sure to open all mail and promptly mail
or fax any offers of settlement or letters from attorneys to our
Client Relations Office.
Q. Who
looks at my credit report?
Almost every company you make a payment to will check your credit. Prospective creditors will always review at least one of your credit reports before granting you credit. Today it is increasingly common for insurance companies to review your credit before extending auto or health insurance. Many employers now check credit before they consider you for a position. If you rent, you may have already been through a credit check to determine your worthiness as a renter.
Q. How
much bad credit does it take to be denied credit?
As you may have already experienced, even one small late pay listing may result in credit denials. It is a myth that a large amount of positive credit can outweigh some negative credit. Any negative credit whatsoever can become a substantial credit obstacle.
Q. Does
paying off past-due accounts neutralize their negative status?
No. Paid, once-delinquent, debts still show up as severe negatives. It's important to note that credit reports don't just show your current credit situation, but they also show what your credit situation has been in the past. Therefore, past delinquency, collection activity or charge off does a great deal of damage to the credit score even if it was paid off.
Q. Do
I need to pay my unpaid balances?
If there are delinquent accounts appearing on your credit report that have not been paid off, the actual debt behind the listing may remain the same even if the account is deleted from your credit report. You still owe the same money that you owed in the first place. If you don't pay the debt, the creditor or collection agency could always re-report the item. So removing the listing without addressing the debt is only a temporary solution.
Q. How
long does the process take?
The progress of your case will depend on your participation (sending in credit reports on a timely basis,) the nature of your case, and the level of credit bureau cooperation.
Statistically, participating clients have received, on average, 8-10 line corrections by their third month, 12-16 line corrections by the sixth month, and 16-25 line corrections by the end of nine months. Past performance in not a guarantee or promise that we can help you achieve precisely the same results as we have other clients in the past. Your results may be better or worse.
Q. Can
I restore my own credit?
Given a lot of effort, experience and study, you could do some of what our staff does.
A big factor to consider is the amount of knowledge, study, preparation, time and follow-up required to effectively dispute with all three credit reporting agencies. The time needed to get it done is literally like having a full time job.
Q. Does
paying my bills restore my credit?
You would think that would be true. But, again, the credit reporting system just doesn't work that way.
When you pay an old debt, the negative credit listing doesn't disappear. Once paid, it will appear on your credit report as a paid delinquency, charge off or collection (whatever the case may be.)
You won't get very far paying your debts unless you also work to restore your credit at the same time. The good news is that we can help you settle those debts and save you a lot of money in the process.
Q. Do
negative items lawfully need to remain for up to 10 years on my credit history?
NO. Even so, consumers hear it every day when they telephone creditors directly: "Sorry, by law that has to remain on your report for seven years." The bureaus may want consumers to believe the lie because it keeps them in business. But, the truth is that nobody is required to report anything about any of us for any minimum length of time to anybody else.
