Frequently Asked Questions
If you are searching for answers to
your debt related problems, select from the series of
questions below:
Q: Why should I choose Debt Regret?
A: Debt Regret is an
industry-leading debt settlement services provider.
Our IAPDA Certified 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 related
problems. Additionally, we are listed with
the Better Business Bureau, Better Internet
Bureau, Dun & Bradstreet, and the American Bankers Association
and are members of the Greater Dallas Chamber of
Commerce. We are very proud of our good standings and we intend to keep it that way. Debt regret 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.
The two most common forms of consumer bankruptcy
are:
Chapter 13 involves reorganizing your debt in such a way that you a can keep the property you might otherwise lose, For example, a car or home. Chapter 13 will allow you 3-5 years to pay-off the items you have as opposed to losing them entirely.
Chapter 7 is the most straightforward form of bankruptcy. It involves liquidating all of your assets. However, this can depend upon the laws for the state in which you live. Traditionally, a court appointed representative will sell your personal property or it will simply be returned to the creditors that you owe money to. Federal law only allows consumers to file for Chapter 7 bankruptcy every six years.
Note:
This should not be
considered legal advice. Debt Regret does not
provide legal or tax related advice. If you need
any type of legal or tax related advice, you
must contact a licensed attorney or a qualified
accountant.
Q: Will all of my creditors be open to debt settlement?
A: Debt Regret evaluates each client’s situation on an individual basis. We maintain relationships with numerous consumer-lending institutions and traditionally know exactly which ones are willing to settle and typically at what percentage. We will not accept into our program debt from creditors or collectors that have proven difficult to work with or situations that will hinder our ability to settle your debts.
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 less than you currently owe. This
can 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 these "non-profit" debt consolidation companies are funded by the credit card 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 IAPDA Certified Debt Arbitrators have
can help ensure you get the best settlements
possible.
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.
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 Regret can
achieve debt relief 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: By not making the required minimum monthly payments to your creditors, it is possible that you are breaking the terms of your agreement with them and most likely will be reported to consumer reporting agencies as a delinquent customer. This is the case whether you are currently enrolled in a debt settlement program or not. Upon enrolling in a debt settlement program, your credit score will probably get worse before it gets better;
however, this is a minor price to pay for being given a substantial debt settlement and not having to file for bankruptcy!
Once we have settled your debts, we request that your creditors report these accounts as paid to the satisfaction of the creditor
with a zero balance owed. However, it is important to realize that if you want to maintain a "good credit rating", you have to pay you bills on time; anything else will cause your credit score
to suffer.
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 Analysts. This can be done by filling out a request form or calling us at 1-888-902-3328 (DEBT). Our Debt
Analyst will assess your financial situation and determine whether you are a candidate for our debt resolution program.
Second: Upon acceptance, your
Debt Analyst will help collect and gather the information and documentation that is needed for us to assist you. After a complete financial analysis, your Debt
Analyst will help you establish an affordable monthly payment, which, after enrollment fees, will be placed into a personal savings account
that you maintain and control. This savings 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
help in the effort to get you back on track to
financial stability.
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
financially stable lifestyle. This will help
you regain control of your finances and increase your financially
viability.
Q: Will creditors continue to contact me after joining the program?
A: Once enrolled in the Debt Regret program, our team of professional
debt arbitrators will contact, at its discretion,
your creditors and instruct them to direct 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 Regret will
request that all
communication involving your accounts be directed 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.
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.
Note:
This should not be considered
legal advice. Debt Regret does not provide legal or
tax related advice. If you need any type of legal or
tax related advice, you must contact a licensed
attorney or a qualified accountant.
Q: Who is responsible for the savings fund necessary to settle my debt?
A: You are responsible for your own savings account. A savings account is set up and maintained by you. The program requires that you make a deposit into this savings account during each month of the program. However, this monthly payment will be considerably less than the total monthly payments you are currently making. When you have accumulated funds sufficient to settle an outstanding debt, you will notify us to begin the settlement process. After a settlement has been agreed upon, you will receive a letter from your creditor signifying the dollar amount needed to settle your debt. The funds from your savings account will be used to send your creditor a certified check or money order to settle your debt. This is the preferred method for our clients, because you have complete control of your own savings account. Additionally, you have the last word in the settlement process. By this we mean that no settlement can be completed unless you send the check. Additional details will be provided upon enrolling in the program.
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. 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 Regret help you avoid
bankruptcy, achieve debt relief, and regain control
of your finances.
Q: Who is responsible for payment to my creditors?
A: Debt Regret does
not and will not disburse funds to your creditors at
any time. Once Debt Regret has
successfully negotiated a settlement amount for your
one or more of your debts, you will make the payment directly to your
creditors from your own savings account. Once the
payment has been applied to your account, it will be
considered a settled debt and you will be one step
closer to meeting your financial goals with regard
to debt reduction.
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 in 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 home owner, 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 Regret 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.
Note:
This should not be
considered legal advice. Debt Regret does not
provide legal or tax related advice. If you need
any type of legal or tax related advice, you
must contact a licensed attorney or a qualified
accountant.
Q: Will I owe money to the IRS for my reduced settlement?
A: According to the
IRS, 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 Regret does not
provide legal or tax related advice. If you need
any type of legal or tax related advice, you
must contact a licensed attorney or a qualified
accountant.
Q: Is my credit card debt a problem?
A: For most Americans, credit card debt is a dangerous and growing problem. The average American family has more than $8000.00 in credit card debt and spends more than they earn on a annual basis. Credit cards can be useful tools when they used properly, but more and more Americans are getting in over their heads and threatening their financial futures. It is important to realize that just because you can pay your minimum payments each month doesn't mean you don't have a credit problem. Low minimum payments benefit the credit card company, not the consumer. The following are some of the warning signs that you have credit or debt problems:
- You are unable to put any money in savings
- You make only the minimum payments on your credit cards
- You use increasing amounts of your total income to pay off your credit card debts
- You use credit cards for things you should buy with cash, such as groceries
- You have more than two or three major credit cards and have balances on all of them
- You're at or near your credit limit on most if not all of your credit cards
- You're unsure of the total amount you owe on your credit cards
- You've taken out cash advances on credit cards to pay other bills
- You've been denied credit due to your debt to income ratio
- You get calls from collectors about your credit cards
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.
|
Client
Login
Home
They have taken the
pressure off me and been great in helping to
resolve my financial problems. Thank You.
Debt
Relief 12-36 Months
